Option Swing Traders Score in $BIDU

Option swing traders are always looking for change in momentum.  This can be accomplished through a variety of different technical indicators, but every trader has to find what works for them.  In our TNT Option trading service we analyzed Baidu($BIDU) as it was sitting on the 50 day Simple Moving Average.  Our analysis on Monday the 1st of October, said there would be a significant move in either direction.

The chart below shows the Monday night stock price snap shot….Note the $222.60 and $219.90 flat lines below the current price.

Unfortunately, the stock gapped down into a support area between $222 and $219.90, where the average trader would have moved on to the next opportunity.  Traders who came to the TNT webinar on Tuesday morning were able to get further analysis as the market was live.  Here we saw that the FXI (Chinese market ETF) had a similar move and the NDX sold off as well.  Our new trigger became trading below the 219.90 flat line.   Our subscribers know to buy puts when we are trading to the downside.

Over the next few days the stock proceeded to drop from $219.90 to a low of $202.21.  Most of our subscribers were rolling with each update that we put out to alert to a new price level.  The stock dropped to our initial target of $215.50 pretty quickly, then hit our next target of the $213.63 flat line and then the $210.48 flat line.  At each of these levels, option traders were rolling to lock in their profits.  On  October 4th we put out several alerts with the final being to consider a last roll or exit as the stock had rebounded from the lows.  Traders who stayed in were able to get additional $3 of downside movement if they acted on the lows of October 5th.

Traders reported gains of 60 to 120% return on this trade.

The chart below shows the updated price action through October 5th.