Baidu, Inc. (BIDU) Option Traders Brace for More Downside

Baidu Inc (ADR) (NASDAQ:BIDU) put volume is nearing peak levels

May 5, 2015 at 2:03 PM
facebook X logo linkedin


A handful of China-based Internet issues received negative analyst attention today, and for Baidu Inc (ADR) (NASDAQ:BIDU), this meant a downgrade to "neutral" from "overweight" and a price-target cut to $215 from $240 at J.P. Morgan Securities. As a result, shares of BIDU are 4.7% lower at $194.09, and put volume has popped to 1.6 times what's typically seen at this point in the day.

One of the more active options is BIDU's weekly 5/8 200-strike put, where it appears a portion of the activity is of the buy-to-open kind. In other words, speculators expect the stock to continue its retreat from the round-number $200 mark through this Friday's close, when the series expires. Amid today's drop, delta on the put has moved to negative 0.81 from negative 0.25 at last night's close, indicating an increased probability of an in-the-money finish.

Widening the sentiment scope reveals option traders have been buying to open puts over calls at a faster-than-usual clip of late. Specifically, the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.77 ranks in the 90th annual percentile.

Outside of the options arena, the outlook for BIDU is more upbeat. Of the 13 analysts covering the shares, 11 maintain a "strong buy" recommendation, with not a single "sell" to be found. Plus, the average 12-month price target of $246.36 stands at a 27% premium to current trading levels. Should Baidu Inc (NASDAQ:BIDU) widen its nearly 15% year-to-date deficit, another round of bearish brokerage notes could pressure the shares even lower.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI