Monday October 26, 09:22 PM
STOCKS NEWS US-Option traders see Baidu post earns move
Stocks on the move
Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1701 ET 26Oct2009-Option (OPTI.NX - news) traders brace for post earnings move in Baidu
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A number of option traders were looking for large share price swing in
China Internet search giant Baidu Inc (NASDAQ: BIDU - news) after it reports earnings due on
Monday. Its U.S.-listed shares fell 2.34 percent to $432.97 and reached a
52-week high of $439.90. Baidu options were busy. Volume was double the norm
with 39,000 calls and 24,000 puts traded, according to Trade Alert.
'Front-month November (Frankfurt: A0Z24E - news) options were active in both puts and calls with strike
prices as far $100 away from the current share value,' said William Lefkowitz,
option strategist at vFinance Investments. 'It appears that some traders
initiated volatility plays using both puts and calls.' A lot of the action
appeared to be retail as the top trade earlier was a lot of 200 Nov $460 calls
above the offer for $11.50, said WhatsTrading.com option strategist Frederic
Ruffy. The stock's average implied volatility was 51.3 percent and a skew
between November and December hints at a possible earnings gap move of $34.50
per share, or about 8 percent, when it reports, he said.
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