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)

Jan 30, 2015 at 8:32 AM
facebook twitter linkedin

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.

Special Offers from Schaeffer's Trading Partners