Traders Exclusive: Dan Passarelli on How to Trade Baidu

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