Baidu shares surged after the Chinese Internet provider posted strong quarterly earnings results after Thursday's closing bell. To play it, Brian Stutland of Stutland Equities looked at a strategy using options.
After earnings are released, Stutland said options prices typically start to decline because volatility is taken out of the marketplace. People can no longer worry about how a company will do after the quarterly numbers are out, he explained. Baidu's earnings were great, but its valuation is still high. So anyone interested in this name really needs to believe the China story.