BIDU Nov/Dec Options...Sell 'em

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Uncle_Ho

Looking at selling some nov and dec BIDU options around the 500 strike. Maybe try to leg into some call spreads. Anyone know what the IV on these are or if this is a good idea. Just thought of it so if anyone has any thoughts please share.

The options for the same percentage gain on GOOG stock are much much cheaper. I'm thinking about spreading the two maybe. Short BIDU, Long GOOG for protection.
 
Quote from Uncle_Ho:

Looking at selling some nov and dec BIDU options around the 500 strike. Maybe try to leg into some call spreads. Anyone know what the IV on these are or if this is a good idea. Just thought of it so if anyone has any thoughts please share.

The options for the same percentage gain on GOOG stock are much much cheaper. I'm thinking about spreading the two maybe. Short BIDU, Long GOOG for protection.
More...

bidu is up over 400% while GOOG is up 100 % from march lows....
 
never ever sell single stock options with large gamma/vega exposure, not as retail not institutionally. It can really burn you badly. If I ever learned anything on the institutional prop side then it was not to ever take any significant net exposure to short options positions in single stocks.

Quote from Uncle_Ho:

Looking at selling some nov and dec BIDU options around the 500 strike. Maybe try to leg into some call spreads. Anyone know what the IV on these are or if this is a good idea. Just thought of it so if anyone has any thoughts please share.

The options for the same percentage gain on GOOG stock are much much cheaper. I'm thinking about spreading the two maybe. Short BIDU, Long GOOG for protection.
More...
 
Quote from Uncle_Ho:

Looking at selling some nov and dec BIDU options around the 500 strike. Maybe try to leg into some call spreads. Anyone know what the IV on these are or if this is a good idea. Just thought of it so if anyone has any thoughts please share.

The options for the same percentage gain on GOOG stock are much much cheaper. I'm thinking about spreading the two maybe. Short BIDU, Long GOOG for protection.
More...

BIDU Options' IVs are not as rich as they are used to be. Today the IVs for Nov and Dec ATM calls are 49.5% and 47.5% based the Options Lab. Just plain naked call ? I would pass.

The ER for BIDU will be around early Nov, I guess.

Based on the ER expectation, I would like a calendar spread on price level at 380, 400 or 420. depends on how bearish or bullish I am at the time.

See attached screen shots for 400 Calendar spread, thanks to the Options Lab ( http://www.TheOptionsLab.com )
 

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I like that idea a lot, would you sell a nov 400 and buy a dec 400. Could you get nailed on that more than if you were short the 400s naked. I;m hopefully trying to leg into a nice call spread or, spread BIDU vs GOOG
 
Quote from Uncle_Ho:

I like that idea a lot, would you sell a nov 400 and buy a dec 400. Could you get nailed on that more than if you were short the 400s naked. I;m hopefully trying to leg into a nice call spread or, spread BIDU vs GOOG
More...

Both BIDU and GOOG are in the same business and their stocks usually moves in tandem. BIDU's ER date is less than a month after GOOG's.

The thing I found is that BIDU usually reacted to GOOG's ER but I almost never saw GOOG reacted to BIDU's ER.

Using GOOD's options as a hedge to naked BIDU options selling just does not make much senses to me.

Just my two cents.
 
Quote from Uncle_Ho:

Looking at selling some nov and dec BIDU options around the 500 strike. Maybe try to leg into some call spreads. Anyone know what the IV on these are or if this is a good idea. Just thought of it so if anyone has any thoughts please share.

The options for the same percentage gain on GOOG stock are much much cheaper. I'm thinking about spreading the two maybe. Short BIDU, Long GOOG for protection.
More...

Hope you did NOT commit the trade. BIDU jumped almost 10% in just three days :-}
 
I dont sell OTMs in the middle of trading ranges. Only on a big gap or a pop in vol or something like that. Haven't put it on yet, I still think GOOG, AAPL, BIDU, GS still have a little more room to run on the upside. Trying to sell the top of this trend channel.

Another 4-5% gain on BIDU and i'll sell them, hopefully I get that chance by the end of the week. I just believe that this rally might stall out for a bit, I don;t know if it will go much lower, but I definatly don't think another 30% gain is in the cards from here.
 
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