Shanda Interactive Entertainment (NASDAQ:SNDA) engages in development and operation of online games and related businesses in China. It offers a portfolio of online games, which users play over the Internet. These games include The Legend of Mir II and The World of Legend. The company operates both multiplayer online games, including multiplayer online role-playing games; and casual online games.
Stocks in the Chinese Internet segment rallied last week as investors speculated on the growth of online activities in Asia. Shares of Sohu.com (SOHU), Sina Corporation (SINA) and Netease (NTES) were among the best performers while SNDA shares consolidated in the wake of previous gains. Despite the lack of participation in Friday's rally, Shanda Interactive remains fundamentally sound and traders say the upcoming Bear Stearns conference may be the catalyst for another move higher as the company will discuss its plans for the growing interactive entertainment market. The technical (chart) indications reflect a solid support area below the current price and our analysis suggests this position offers reasonable risk versus reward potential for conservative investors. Traders should target a higher premium initially, to take advantage of the daily volatility in the underlying issue.
Fundamentals Chart Earnings Dates Analyst Ratings
Suggested (Bullish) Option Position:
Sell Put JUL 30.00 QKU-SF
Target Price = $0.45 Open Interest = 287
Potential Profit (5 contracts @ $0.45) = $225
Initial Margin (5 contracts) = $4,055
Return on Investment (max) = 4.1%
Cost Basis in Stock = $29.55
Days to Expiration = 41