Bada Bing, Bada BIDU
Most of the headline news this week was showing weaker growth in China. Since I am a believer in relative value, weaker growth in China is well, relative. Either way the Chinese equity markets have been kind of plonky this year. It is just kind of a slow drift down without much pop. When a Chinese stock does have a move, I take notice.
Here in the new Option Vision™ platform with ORATS you can see the strike by strike volatility activity this afternoon in BIDU, a popular Chinese internet stock. Note many of the big green spikes in BIDU per strike. This just shows the name is very active on high volume and slightly increasing volatility. No surprise as it had a $15 range yesterday.
One thing about the colors below is some red in the more out of the money put strikes in September. From yesterday to today some heat came out of the near term, downside options. After a short move down this a.m. with general market softness BIDU came back a bit. That small rally took some implied volatility out of the downside options.
This is probably a short term buying opportunity in BIDU. The best way to me would be to buy some out of the money call time spreads for low deltas and let the rest of September volatility melt away. With some news on the Greece restructuring coming out in Oct (November is the earning cycle month) the time spread is a smart play to play a bounce.
OptionVision™ – data from ORATS
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