DailyPlay – Opening Trade (BIDU) Closing Trade (NEM) – February 19, 2025

Closing Trade

• NEM– 51% gain: Sell to Close 5 Contracts (or 100% of your Contracts) Feb 28 $42 Calls @ $5.80 Credit. DailyPlay Portfolio:  By Closing all 5 Contracts, we will receive $2,900. We initially opened these 5 Contracts on Feb 7 @ $3.85 Debit. Our gain, therefore, is $975 which is almost 1% gain on our Portfolio.

BIDU Bullish Opening Trade Signal

Investment Rationale

Baidu, Inc. (BIDU) recently broke out above resistance while outperforming the S&P 500 but pulled back following the company’s earnings announcement yesterday. It is now consolidating around the 90 level in a congested support area.

BIDU remains undervalued relative to its industry, despite growth and profitability metrics that are in line with sector averages. China’s latest deregulation efforts are expected to drive its tech and AI ambitions forward, positioning the country to compete more directly with the U.S. and enhancing shareholder value.

Fundamentally, BIDU is modestly undervalued. The company has a forward P/E ratio of 9.88x, significantly lower than the industry average of 20.89x. Its expected EPS growth is 10.88%, compared to 14.43% for the industry. Revenue growth is projected at 1.84%, while the industry average stands at 12.29%. However, BIDU maintains stronger profitability, with net margins of 15.81% versus the industry average of 7.89%.

BIDU – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 5 Contracts BIDU April 4 $87/$80 Put Vertical Spreads @ $2.83 Credit per Contract.

Total Risk: This trade has a max risk of $2,085 (5 Contracts x $417) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $417 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue its bullish trajectory.

1M/6M Trends: Bullish/Mildly Bullish

Relative Strength: 5/10

OptionsPlay Score: 105

Stop Loss: @ $5.66 (100% loss to value of premium)

View BIDU Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday ‘s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View BIDU Trade