SEPT. 1, 2021: Chinese Education New Oriental Edu. & Tech (EDU) and Iqiyi Inc (IQ) Ask-Side Options Flow Shows Bullish Expectations

SEPT. 1, 2021: Chinese Education New Oriental Edu. & Tech (EDU) and Iqiyi Inc (IQ) Ask-Side Options Flow Shows Bullish Expectations

1:58PM ET: Chinese education stocks came to life during today’s trading session. Iqiyi Inc. (IQ) reached as high as $10.20 this morning, and has been holding steady at around +11.5% throughout the day, with New Oriental Education & Tech Group (EDU) reaching as high as +12%.

Much like the Chinese Tech and e-Commerce, Chinese education companies have taken massive hits in recent months due to sweeping regulatory crackdowns on business by China’s government. New Oriental Education & Tech Group (EDU), for example, is down 87% since March 1st.

EDU is down 87% since March highs


Recently, though, the options and premiums for EDU and IQ have been especially bullish. Pictured below, we can see that the EDU options flow is not only elevated in volume this week, but the bull-sided options flow has been as high as 89% of all premium this week.

EDU Daily Options Breakdown


In the recent Unusual Whales blog analyzing unusual options activity and dark flow, we can see that EDU especially has seen an increase in activity not just on its options chain, but also shows significant activity in Dark Pool transactions. This continued today,  as seen in the images below, with ask-side orders leaning heavily bullish for EDU, and Dark Flow showing bullish transactions.

EDU Ask-Side Flow heavily bearish; $5k Min. Premium; Heavy focus on $2.5c 10/15/2021 


EDU Dark Pool Flow reflects a bullish sentiment; massive buy transactions at $2.49 and $2.38



Iqiyi Inc. (IQ) also shows the same sentiment today. Bullish premium reached as high as 84% of options flow, and today, though unfinished, shows the highest options volume of the week.


Looking at today’s options flow, we can see that the sentiment around IQ reflects this same bullish outlook in the last few hours of trading that was demonstrated this morning.

IQ Ask-Side Options Flow this morning showed bullish sentiment before it broke $10; heavy focus on the $10c across multiple months
Bullish sentiment continued into the afternoon



This afternoon flow seems to indicate that IQ could see more upside. The focus is on in the money and at-the-money strikes ($7.5c, $10c) for the short term.

It’s not entirely clear what the future will bring for these Chinese education stocks. Such is the case for Chinese Tech and eCommerce, we’ll have to wait and see what comes of the regulatory overhaul.

Until then, we’ll keep Whale-watching together.