Friday, March 16, 2012

profitable trade in $BIDU

2/24: I sold to open Mar 125/120 credit put spread for $.62.
I did this 12x and collected net $728.39. P was $134.86.
I decided to let this postion expire worthless today for full profit.

Note: I entered the trade after a decline in bidu that I didn't think was warranted. I also gave myself a good sized buffer (7.3% as price at the time was 134.86). In addition, I was also confident that should the stock continue to go down, I could:

1) reset lower within the same period + more lots (ex: close 12x125/20 open 14x120/115 etc.)
2) punt out and up (close Mar12x125/20 open Apr12x110/105 or several other ways)
3) punt out and into an iron condor (allows for much further out of the money cr put spread but then will have a credit call spread too)
4) sprawl into an iron condor in the same period

I don't have a good April bidu entry point yet. I will continue to watchlist it.

$AAPL $bidu  $SPX $NDX $RUT $C $GS $wynn