Trade Breakdown: BIDU

Strategy by Charlie Bathgate

Trade Breakdown: BIDU


BIDU has been a name we have been monitoring for a few weeks for a breakout.

From May 17th to May 21st, the stock tumbled 42 points from a high of $282 down to $240. Since then the stock stayed rangebound between $240 to $245. As it hit the lows on May 21st we saw a $1.57M call sweeper hit the board into weakness:

On Friday, June 1st we began to see life as sweeps and refreshing orders hit the offer on the tape during the early hours of trading.

Buyers lifted the stock out of the $240/$245 channel as it closed the week at $248.81. On Monday we saw explosive momentum upwards when the SPY gapped higher off the open and Wall St. Jesus’ option scanners picked up several weekly sweepers:

The stock ripped to high of $260.88 and many of our traders in the Steamroom cashed in handsomely:

Let’s take apart a few of these trades.

Michael.s bought the Jun 8 255 weekly calls on Friday, June 1st for $1.65 when the stock started to break out of its range. He held the option throughout the weekend, and he sold the option into strength within the first 10 minutes at $4.65.

He profited 181% off of this short term hold!

The winner of the day goes to Kimchi_Trades1. He bought various BIDU strikes that he also held over the weekend. One of the strikes he purchased was the weekly June 8 252 call option that he bought at $2.29 on Friday. He held the position right before the stock hit the HOD and sold at $9.00. Along with his other two positions, he ended up gaining over 265% on all three plays!

The tape of this particular stock isn’t typically that exciting. One will rarely find BIDU’s tape moving like AAPL or NFLX. However, the change in behavior on the time and sales led us to believe there was a move coming. Also, the market completely sold off on May 29th, but BIDU still held up within its consolidation range with no heavy selling at all. With the SPY pushing higher and call sweeps repeatedly hitting the board, our members took down this trade with ease.

Not a bad way to start the month of June!