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Trade Details: Bought to open 3 Jun 16th Baidu Inc (NASDAQ:BIDU) 177.5 puts for $0.59, $183.58 total cost (82.5% of account), 21 days to go. The trade executed at 14:25:24 when the stock was approximately $190.20.
Potential: It's difficult to state a profit target here. I'm looking for a gamble to vault my account over $1k to get real-time quote access on optionshouse -- I know, that's a ridiculous mental association for a trade target, but a quick move down to the $180 level could do it. If the trade isn't working, I'll look to close this position no later than June 9th.
Thesis: Frankly, I don't know much about the Baidu story. I recall reading the last earnings report wasn't completely clean. This is purely a technical call.
Obviously, the prominent feature on the above chart is a complete bearish harmonic bat pattern. The stock tested and failed $193.50 three times this week, and moved bearishly through a rising trendline today. The MACD is in alignment on the 1 day / 2 hour / 30 minute chart array, indicating near-term weakness. There's also bearish divergence on the RSI indicator (i.e. since late April, it's value moved lower as the stock moved higher).
Note: A more manageable directional debit position would be the July or August 185's, but my capital position doesn't allow much flexibility. And, without real-time quotes, I had no idea where the market was for the June 177.5's, so I placed a limit order at $0.70 (to maximize my available cash) -- I was filled 11 cents lower.