SINA Corp (NASDAQ: SINA), a Chinese online media company, is scheduled to report Q2 EPS on August 6. SINA August option implied volatility is at 78; September is at 55. SINA average option implied volatility over the last 26-weeks is 58 according to Track Data, suggesting larger August price movement.

The9 (NASDAQ: NCTY), an online game operator headquartered in Shanghai, closed at $22.73. NCTY is scheduled to report Q2 EPS on August 7. NCTY August option implied volatility is at 101, September at 81; above its 26-week average of 69, suggesting larger price movement.

NetEase (NASDAQ: NTES), an interactive online community in China, is scheduled to report Q2 EPS after the market close on August 13. NTES August option implied volatility of 70 is above its 26-week average of 45, suggesting larger price fluctuations.

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

MOST NOTEWORTHY: Targeted Genetics, Tesco and The9 were today's noteworthy initiations:

• Rodman initiated Targeted Genetics Corporation (NASDAQ: TGEN) with a Market Perform rating, citing lack of key near-term drivers and the absence of definitive proof-of-concept data for its lead arthritis program.
• ING assumed Tesco Plc (OTC: TSCDY) with a Buy rating, citing the company's growing international business.
• Piper initiated The9 Limited (NASDAQ: NCTY) with a Neutral rating and $21 target, citing limited visibility around the company's FY08 and FY09 game releases and a higher risk profile than peers.

OTHER INITIATIONS:

• Baird initiated Gladstone Capital Corporation (NASDAQ: GLAD) with a Neutral rating and $19 target.
• Goldman initiated Brazilian banks with an Attractive view, starting Banco Bradesco SA (NYSE: BBD) with a Buy rating, Banco Itau Holding Financeira SA (NYSE: ITU) with a Neutral rating and Unibanco-Uniao de Bancos Brasileiros (NYSE: UBB) with a Sell rating.

MOST NOTEWORTHY: PhotoChannel Networks, BioMarin Pharmaceutical, Double-Take and Leapfrog Enterprises were today's noteworthy initiations:

• Merriman believes PhotoChannel Networks (OTC: PNWIF) is positioned to become a leading provider to the digital photofinishing market through its offering of a fully-integrated solution to retailers. The firm started shares with a Buy rating.
  
• Jefferies resumed coverage of BioMarin Pharmaceutical (NASDAQ: BMRN) with a Buy rating and $33 target, as they expect strong long-term growth from Aldurazyme and Naglazyme and is optimistic for Kuvan approval and a strong market launch.
  
• ThinkEquity is positive on Double-Take's (NASDAQ: DBTK) impressive operating leverage and valuation and started shares off with a Buy rating and $28 target.
  
• Needham initiated Leapfrog Enterprises (NYSE: LF) with a Strong Buy rating and $11 target. The firm expects Leapfrog to benefit from its turnaround initiatives in 2008 and for shares to be driven by improving sales and profits.

OTHER INITIATIONS:

• UBS started J Crew (NYSE: JCG) and American Eagle (NYSE: AEO) with Neutral ratings and targets of $40 and $25, and Gap (NYSE: GPS) and Abercrombie & Fitch (NYSE: ANF) with Buy ratings and targets of $23 and $97.
  
• Goldman initiated The9 (NASDAQ: NCTY) with a Neutral rating. Broadpoint initiated Vocus Inc (NASDAQ: VOCS) with a Strong Buy rating.

The9 (NASDAQ: NCTY) implied volatility elevated into 8/29 EPS.

NCTY, an online game operator headquartered in Shanghai, is recently down $0.10 to $38.65. NCTY is expected to report EPS on 8/29/07. NCTY has a market cap of $996 million. NCTY September option implied volatility of 79 is above its 26-week average of 59 according to Track Data, suggesting larger risk.

Shanda Interactive (NASDAQ: SNDA) September implied volatility elevated into EPS.

SNDA, an interactive entertainment media company and operator of on line games in China, is recently up $1.56 to $30.68. SNDA has a market cap of $2.2 billion. SNDA is expected to report second quarter EPS on 8/28. SNDA September option implied volatility of 70 is above its 26-week average of 46 according to Track Data, suggesting larger risk.

NetEase (NASDAQ: NTES) implied volatility of 43 above 26-week average of 36.

NTES, an interactive online community in China, is recently down .10 to $16.33. NTES over all option implied volatility of 43 is above its 26-week average of 36 according to Track Data, suggesting larger price fluctuations.

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

Electronic Arts (NASDAQ: ERTS) is spending about $167 million for a 15% share in The9 (NASDAQ: NCTY), one of China's largest online game operators. In March, Electronic Arts bought 19% of NeoWiz, a Korean company, for about $105 million.

While these moves into Asia are part of a strategic initiative to develop a stronger distribution network in the region, it got me wondering: If Electronic Arts is in a buying mood, what about Take-Two Interactive Software Inc. (NASDAQ: TTWO)? The company has been plagued by just about every scandal imaginable: options backdating, overstated earnings, porn in video games, etc. But after major institutional investors ousted the company's slimy management, things could be in store for a turnaround. and investors who are fed-up with the company's underperformance may want it to explore a sale.

The prices paid for The9 and NeoWiz might make Take-Two look inexpensive, with its market cap of $1.4 billion, and strong brands, mainly the Grand Theft Auto series (I don't normally play video games, but Grand Theft Auto is amazing).

The shares were up almost 3% today, so maybe investors think Take-Two is a takeover candidate, too. I wouldn't be buying the stock here, given all the problems that are still dogging the company, but there's no arguing that its brands have a lot of value.

MOST NOTEWORTHY: Chipotle Mexican Grill, Inc (CMG), Caterpillar Inc (CAT), The9 Ltd (NCTY), Teekay Shipping Corp (TK) and Ship Finance International Ltd (SFL) were on today's noteworthy downgrade list:

• Morgan Joseph cut Chipotle Mexican Grill (NYSE: CMG) to Hold from Buy on valuation.

• Stifel downgraded Caterpillar (NYSE: CAT) to Hold from Buy on valuation.

• Pacific Crest cut shares of The9 (NASDAQ: NCTY) to Sector Perform from Outperform with a $41 target following the disappointing Q1 results and slow start to the second quarter.

• Banc of America downgraded shares of Teekay Shipping (NYSE: TK) and Ship Finance Int'l (NYSE: SFL) to Neutral from Buy on valuation and a lack of near-term catalysts...

OTHER DOWNGRADES:

• Matrix USA cut Valhi, Inc (NYSE: VHI) to Sell from Hold.

• UBS downgraded Franklin Resources (NYSE: BEN) to Neutral from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).