Investing With Options header image ≡ Menu

Just Released: Get Your FREE Iron Condor Trading Toolkit

Click Here to Download

BIDU Earnings Rundown

With the option shorts getting GOOG'd last Friday, it's going to be interesting as to whether competitor $BIDU will continue in its uptrend and have a sustained upside reaction.

There can often be a sympathy move within a particular sector; for instance, if $PCLN goes up big on earnings, $EXPE most likely as well. This assumes that sector fundamentals will improve earnings across the board. We would expect to see that sort of action with BIDU relative to $GOOG, but the two names have often run inverse one another due to China competition.

Current $BIDU options are expecting about a 9% move in either direction-- we can derive that by looking at the ATM weekly straddle and divide the price over the strike. The average gap is around 10%, so options seem to be coming in a little light.

While the stock is in an uptrend, Q3 earnings reactions have been higher only 1/5 times (20%) compared to an overall earnings reaction of 13/21 overall (65%). There's clear support coming in around 90, so if there is a negative price reaction, it will most likely be tempered by market demand.

Am I trading BIDU? Probably, but you've got to be a member to find out.

by Steven Place

Steven Place is the founder and head trader at