HSBC Holdings (NYSE: HBC), a United Kingdom-based banking and financial services company, rallied on the Hong Kong stock exchange; following a report it held talks with China's sovereign wealth fund about a potential investment in the bank.

HBC is expected to report Q2 EPS in late July.

HBC August option implied volatility of 32 is near its 26-week average of 30 according to Track Data, suggesting slightly larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com