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Traders Exclusive: Dan Passarelli on How to Trade Baidu

From the floor of the CME group Dan Passarelli, CEO of Market Taker Mentoring Inc.

From the floor of the CME group Dan Passarelli, CEO of Market Taker Mentoring Inc. discusses a trade in Baidu (BIDU). BIDU has been moving higher since May and has recently broken out of its channel. The 170 level has been a previous pivot level and is now its support level. Implied volatility is above historical and this is perfect for a put credit spread. He likes selling the 165, 170 credit spread for the July expiration, because as long as it stays above 170 its a good trade. The puts are expensive right now because volatility is high, which is rare in this low volatility market. He suggests taking 75% of profit or more if the stock begins to fall.

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