PDD Investors Load Up on Put Options That Could Hedge Against Bigger Stock Slump
Temu parent $PDD Holdings (PDD.US)$ is seeing increasing demand for put options that could protect the shareholders from further declines as its American depositary receipts (ADRs) slumped 30%.
"Revenue growth will inevitably face pressure due to intensified competition and external challenges,” VP of Finance Jun Liu, said in the company's earnings release Monday. “Profitability will also likely be impacted as we continue to invest resolutely.”
That compounded worries for the Shanghai-based e-commerce giant that acknowledged that revenue growth slowed in the second quarter from the previous three months. On Monday, the company reported revenue of 97 billion yuan ($13.36 billion) for the three months that ended June 30. That missed the average estimate of about 100 billion yuan expected by analysts.
More than 525,600 options changed hands in the first half of the trading day, landing PDD in top 3 most traded stock options, just behind market favorite $NVIDIA (NVDA.US)$ and $Tesla (TSLA.US)$, which have been alternating in first place. (To see the options ranking, click here.)
The most popular PDD contracts were put options giving the holders the right to sell its ADRs at $90 each. Volume reached 52,500 across 17 expiration dates stretching through Jan. 16, 2026. Almost 80% of those put options are expiring in four days. (To see PDD's options chain, click here.)
The price of the $90 puts expiring by Friday climbed 1,140% to $1.25 per ADR, as the stock tumbled near that strike price. Each option covers 100 shares.
Even speculators and institutional investors are piling into put options. Among the unusual activities posted involved a buyer paying a premium of $1.77 million for 9,410 put options that give the holder the right to sell PDD 941,000 ADRs at $99 each by the end of this week. That trade was posted at 9:41:49 a.m. in New York Monday, data tracked by moomoo showed.
(To see unusual options activity, click here.)
As the stock slide, funds are pulling money from the stock. Outflows outpaced inflows by $314.17 million, trimming this month's net inflows to $341.7 million, according to data tracked by moomoo. But the tide could soon be turning, if technical indicators proved to be right. Ten of the 15 gauges seen on the moomoo app are flashing positive signals that the shares could now be oversold, and the trend may turn bullish.
Do you expect PDD to keep sliding, or will the ADRs rebound? Share your thoughts below and if you have a price forecast, please vote below.
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Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
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Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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104166257 : hi
1000r to 10000r : 110
元气少女洛丽塔 : 13.6 billion is not 133.6 billion.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Tiggerpepper : Putting means they want it to go down.
Laine Ford : no comment now
LittleSoldier : Yea, how sick is this world where it’s more profitable to tear shit down and destroy it than it is to build something worth while. I take a stand that’s not for me and I don’t care how much money there is in it!!
high limits LittleSoldier : its type c company.
搞经济 抄底 加仓 : un-professional and unethical speech as a CEO on an important earnings call day. He should be fired
Tonyco LittleSoldier : Did you read what the ceo said? LOL, the guy nuked his own company
Space Dust LittleSoldier : too many chiefs ( corporations) and not enough Indians ( consumers/customer/worker).
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