Options Check-Up: Baidu, Inc., Qihoo 360 Technology, and SINA Corp

Analyzing recent option activity on Baidu Inc (ADR) (BIDU), Qihoo 360 Technology Co Ltd (QIHU), and SINA Corp (SINA)

by Griffin Kruse

Published on Jan 30, 2015 at 8:32 AM
Updated on Jun 24, 2020 at 10:16 AM

Among the stocks attracting attention from options traders lately are Chinese Internet providers Baidu Inc (ADR) (NASDAQ:BIDU), Qihoo 360 Technology Co Ltd (NYSE:QIHU), and SINA Corp (NASDAQ:SINA). Below, we'll break down how options traders are positioning themselves, and how much speculators are willing to pay for their bets on BIDU, QIHU, and SINA.

  • BIDU has taken a breather since notching an all-time high of $251.99 in mid-November, settling at $220.39 yesterday. Off the charts, Baidu Inc entered a strategic collaboration with audio and electronic systems manufacturer Harman International Industries (NYSE:HAR). Despite the stock's pullback to support in the $220 region -- and unlike just a few weeks ago -- sentiment in the options pits and amongst the brokerage bunch is majorly bullish. All 12 analysts covering BIDU rate the stock a "strong buy," and its 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.17 sits in the 86th percentile of its annual range. From a historical standpoint, traders are paying a fair price for their near-term bets on BIDU, per its Schaeffer's Volatility Index (SVI) of 40%, which is in the 43rd percentile of all similar readings taken over the past year.

  • Shares of QIHU dropped 1.8% yesterday, to land at $59.10. On a year-to-date basis, though, the equity remains 3.2% higher. Presently, sentiment in the options pits runs counter to the analyst community. Qihoo 360 Technology Co Ltd's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.72 reads in the bearishly skewed 84th percentile of its annual range, while eight out of nine covering analysts rate the stock a "strong buy." Short-term options for QIHU are currently available for bottom-of-the-barrel prices, with its SVI of 43% sitting in the 12th percentile of all annual readings.

  • SINA has been a long-term laggard, shedding about 46% year-over-year to reach $36.24, and hitting an annual low of $34.89 earlier this month. Accordingly, sentiment in SINA Corp's options pits is nearing a bearish apex, with the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 2.29 sitting just 3 percentage points away from a pessimistic peak. Near-term bets on the stock are priced at a bargain, with its SVI of 36% sitting in the 14th percentile of its annual range.

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