jay_beckner

I play poker and trade options, seeking edges from study, reflection and analytics.

#022 BIDU Puts

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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.

Bearish Harmonic Bat pattern with trade target (yellow box) on BIDU daily chart.

Bearish Harmonic Bat pattern with trade target (yellow box) on BIDU daily chart.

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.

#022 BIDU Puts Closed Profit

#021 SLB Calls Closed Loss