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Thank You Bidu!

BIDU just made our day in the $10,000 Virtual Portfolio (now over $15,000).  How appropriate that BIDU was the first trade we made when we initiated the virtual portfolio on 3/22!

What a difference a week makes!  I was just whining about that ill-timed IBM trade and our hopeless oil puts over the weekend and I'll admit I've been trigger shy this weekend as I didn't want to risk an earnings play in the $10KP until I saw where we stood.

We've been in and out of Bidu a lot this year and we made 2 spectacular trades on it last year so it's a stock we know well, which is why we committed 2 spreads to it in our $10KP.

Kudos to HappyTrading, King of WangsWorld, who, along with BillBigD, made a great timing trade on this stock back in January.  On 1/9, Happy said: "BIDU – Similar to GOOG, but, more momemtum! In with Jan 125 calls @ $2.9 (thought about it at $2.7, but, didn’t act fast enough).Two days later he hit it on the mark with:  "I’m out of BIDU. 130 is high, although it might go higher; but, I watch it for other entry points."

On 1/11 I warned: "BIDU will get dragged down by China if it collapses. If the Dow was at 20,000 and Google was at $950 would you be jumping on the $1,000s? Just be careful! If you own the Feb and Mar $130s – sell them! Especially the Febs."  Louis Lee called it DOA at 12:04 that day: "Divorced Bidu call at doubie, left a few as a scout… " to which Juliet made the call of the day, saying: "Should have bought BIDU puts since Cramer said last night “buy buy buy”.

That was it, we lost interest in BIDU just in time, although some people insisted on playing them again around 2/14 earnings when I said:  "You’re all mad gamblers on BIDU though! Good luck…" and Prof concurred saying "BIDU – Staying out of this craps roll! Impossible to predict direction here."  Those earnings were a disaster and on 2/15 I made a prediction for expiration and set a buy target: "I’ll be surprised to see BIDU finish below $100 – too many putters going in the money. If they do, then the stock is in real trouble (and will make a nice buy when it bottoms!)."  Happy trading once again saved the day buy calling for a buy on the Feb $105s when they hit .90, which gave everyone a nice double in the end.

My 2/26 call on BIDU was also right on the money when someone asked if I thought it would break $115: "BIDU – I think GOOG is down $5 – that’s all I have to think about BIDU…Actually if GOOG breaks below $460 the BIDU $110 puts for $2.75 might make a good mo play."  That night it dropped 5%!  My March 13th update: "BIDU – I wouldn’t touch them while GOOG is crashing, even though it has nothing to do with them."

OptionsSage came back a week later with this post: "BIDU http://stockcharts.com/h-sc/ui?s=bidu this is starting to look really interesting to me on a long-term basis with forward earnings of $3.02 for 2008 according to Zacks. Technically sitting on the same 200-day MA it found support at in August 2006. (Shh…. don’t mention the technicals to the fundie guys!)" and I agreed, saying: "BIDU is a good one to watch but make sure you have GOOG strength to confirm (and with GOOG, $15 min is strenght)."

The real game on call camed from Juliet, our stock timer extrordinaire who said on the 21st: "I don’t like Chinese stocks but I can’t help thinking that BIDU might be ready for a run…The boys on the site have learned not to question Juliet, just do whatever she does!  I was worried about the timing but since we had just started the $10KP on the mornng of the 22nd, I made it my trade of the day:

  • "BIDU – If GOOG runs, then BIDU will run too and I’d take that bet as long as the markets stay positive.
  • "The May $105s (BDQEA) for $5.80 are in a decent position and you can buy those straight or sell 2/3 against the June $105s (BDQFA) for $7.05, bringing that basis down to about $3, which is just a little more than the May $115s cost now so you can probably end up $10 out of the money and still be even. "

Karmcon (our resident accountant) ran the numbers:

  • "Just to let you know if you are contemplating the BIDU transaction referred to above in OptExp doing a 3/2 on the BIDU Jun/May 105’s quote is 8.80 – 10.2 (x 100 for the total of $ 880 – $1020 for entire transaction before opening)"

People got nervous about this one on March 30th and my comment was:

  • "BIDU – I said this yesterday, we aren’t playing these to “win” I fully expect BIDU to recover and I have no desire to change my stance as I expected it to go down (or I wouldn’t have sold the calls) in the short run. If you sold 2 out of 3, like I did, then you could sell 1 $100 call but I wouldn’t change the other 2 unless I get compelling evidence. If anything, on a collapse, I’d rather sell the Apr $95s which have a ridiculous premium at $4.55."

We started liking BIDU again on 4/10 and I made a new play:

  • "BIDU – as a new entry I’d go $6.25 for the June $100s and look to sell the Apr $100s on this top.(currently $1.22 but hopefully $3 or more) XXX (as a new entry)."

On 4/19 we had another scary dip and I said: "BIDU really shouldn’t be this low. The economy is growing like gangbusters over there" and the very next day I was able to say: "BIDU kicking it into gear. If you havent taken out your $100 caller in the $10KP you might want to consider it if they pop $100."  At the close I noted: "BIDU getting pinned back to $100 too (always a good sign if they get forced down out of the money)."

Tuesday was the beginning of BIDU's wild ride and my noon call was: "BIDU – we have to sell some of our Junes in the $10KP into the excitement as we are not covered on 2/3 of our position. I’m setting an $8 stop on the June $100s (now $8.60) and bringing it up .75 for each dollar in gains."  That stop didn't trigger unti this afternoon at $13.50!  Happy ran this chart for us just 30 minutes later:

 

As usual, Happy was dead on the money and BIDU gained another $8 from that point and has added another $24 in the overnights, taking it up to $134.  While we may regret being cautious and selling the June $100s for "just" 13.50, we're going to be very pleased with the June $105s we bought for $7, especially as they were partially paid for by the April calls we sold and bought out!

I want to thank everyone involved for a great team effort on this one – we've got a great trading team and making that kind of money in the (soon to be renamed) $10KP means a lot to some people!  While it's always nice to make money in our own virtual portfolios, helping other people learn to be better traders is what this site is all about and I'm very proud of what we are accomplishing here – thank you all!

Here's a quick status of the $10KP – I've sworn off oil plays as they've proven far too volatile and we're going to stick with spreads, especailly since we found out some of the discount brokers do make it easy for small traders to take spreads (as long as they don't day trade!):

   

 

 

 

Qty

 Buy 

 Price

Sold

Amt. Paid

Value

Profit

BIDU J  $ 105 C 3/22 3 $7.00  $    9.10   $2,100  $   2,730  $     630
BIDU M  $ 105 C 3/22 -2 $6.60  $    7.65   ($1,320)  $  (1,530)  $    (210)
BIDU J  $ 100 C 4/10 3 $6.25  $   13.50 4/25 $1,875  $   4,050  $   2,175
BIDU A  $ 100 C 4/11 -3 $2.00  $    0.05 4/20 ($600)  $      (15)  $     585
BIDU A  $ 100 C 4/11 -3 $2.50  $    0.05 4/20 ($750)  $      (15)  $     735
BSX M  $  15 C 3/26 20 $0.60  $    0.85 4/11 $1,200  $   1,700  $     500
BSX A  $  15 C 4/9 -20 $0.30  $    0.45 4/11 ($600)  $    (900)  $    (300)
DNDN     S 4/6 1 $16.40  $   15.45   $1,640  $   1,545  $      (95)
DNDN M  $  15 C 4/6 -1 $5.50  $    4.60   ($550)  $    (460)  $       90
DNDN     S 4/16 1 $15.77  $   15.45   $1,577  $   1,545  $      (32)
DNDN M  $  15 C 4/16 -1 $5.30  $    4.60   ($530)  $    (460)  $       70
EBAY M  $  35 C 4/18 10 $1.00  $    0.43   $1,000  $     430  $    (570)
EBAY J  $  33 C 4/24 15 $2.00  $    2.48   $3,000  $   3,720  $     720
EBAY M  $  33 C 4/24 -12 $1.75  $    2.02   ($2,100)  $  (2,424)  $    (324)
GOOG A  $ 470 C 4/19 -5 $12.00  $   13.00 4/20 ($6,000)  $  (6,500)  $    (500)
GOOG M  $ 480 C 4/19 5 $14.00  $   11.00   $7,000  $   5,500  $  (1,500)
GOOG M  $ 490 C 4/20 -5 $13.50  $    6.50   ($6,750)  $  (3,250)  $   3,500
IBM A  $  95 C 4/17 20 $0.75  $    0.50 4/17 $1,500  $   1,000  $    (500)
IBM A  $  90 C 4/18 10 $0.75  $    0.60 4/18 $750  $     600  $    (150)
ICE J  $ 140 C 4/17 3 $6.00  $    3.90   $1,800  $   1,170  $    (630)
ICE A  $ 130 C 4/17 -3 $3.00  $    0.75 4/19 ($900)  $    (225)  $     675
ICE M  $ 135 C 4/20 -3 $6.40  $    3.05   ($1,920)  $    (915)  $   1,005
INTC M  $  20 C 4/4 10 $0.44  $    1.25 4/17 $440  $   1,250  $     810
MRK M  $  43 P 3/30 15 0.65  $        -   4/20 $975  $        -    $    (975)
NYX J  $ 100 C 4/9 3 $5.50  $    2.00 4/23 $1,650  $     600  $  (1,050)
NYX M  $ 100 C 4/9 -3 $3.33  $    0.95 4/23 ($999)  $    (285)  $     714
OXPS J  $  30 C 4/9 5 $1.30  $    1.20   $650  $     600  $      (50)
OXPS M  $  25 C 4/19 -5 $0.95  $    0.43   ($475)  $    (215)  $     260
TSO M  $ 105 P 4/2 4 $3.80  $    2.50 4/23 $1,520  $   1,000  $    (520)
TSO A  $ 110 P 4/17 -2 $2.60  $    1.50 4/20 ($520)  $    (300)  $     220
VLO A  $  63 P 4/3 40 $0.50  $        -   4/20 $2,000  $        -    $  (2,000)
                       $   3,283

 


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    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

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  1. Congratulations to everyone for making the outstanding BIDU calls ! ! !


  2. BIDU
    Phil, thanks for making me look so good! I’d like to thank everyone in PSW, my Fidelity crystal ball, and most importantly, Mr. Bollinger for his BBs!! =)


  3. Asia Markets : April 27, 2007

    Japan*

    17400.41
    -28.76
    -0.17%

    Hong Kong*

    20526.50
    -140.79
    -0.68%

    China: DJ Shanghai*

    377.82
    -1.14
    -0.3%

    S.Korea*

    1542.52
    -10.61
    -0.68%

    India

    13922.85
    -306.03
    -2.15%

    * at close
    Sources: Dow Jones, Reuters


  4. BIDU – Congrats all.


  5. Phil
    I m sitting on a pile of M/52.50 puts AMZN bought @ 0.8 thinking the party wouldnot last and which are now diminishing by the day any suggestions what do other then to toast them. Thx Henk


  6. Phil and everyone,

    I’ve been a subscriber and listener now for about a month. You all amaze me with your knowledge and understanding. Your DNDN and BIDU trades have made me a believer that this is the best site to learn from. I don’t always understand everything that is said, but I continue to learn. Congratulations to all and thank you for sharing your insight and experience.


  7. Phil,

    I’m new to PSW and am darned glad I’m here!! You guys are a great team. I finally feel I stand a chance in the market.

    Hey Happy, do yu use Fidelity Active Trader Pro for your trading? I do. The charts look really familiar. If so, any other tools/tips you find helpful at Fidelity?


  8. hw come I missed the BIDU trades. Maybe the communication can be more clear for those who don’t follow it as closely as one would expect