Put Options on CTRP on 7/29/2012

ctrip.com (CTRP) is leading booker of reservations for lodging and airline tickets in China and has about about 10,000 hotels and all major domestic airlines at its disposal. The company also works with some 19,000 hotels abroad and offers packaged tours to its customers, who are mostly leisure and business travelers. Ctrip's services can be found through sales offices in about 50 Chinese cities, by means of a trilingual website, and via 24-hour customer service. Shares last traded at $13.45

We are bearish on this name for the following reason:

1. Shares have formed a bearish "flag", and we expect share to drop out of this bearish formation. The reader should pay special attention to volume pattern as well as price behavior. Shares are expected to set a new low.

Trade: Buy 1 AUG 14 PUT

Trade Buy 1 January $50.00 Call at $0.80 For a net debit of $0.80 Profit/Loss Analysis Breakeven at $50.80 Maximum profit is unbounded Maximum loss is ($80.00) at strike of $50.00 Closing Summary Sold 1 January $50.00 Call at $1.40

Position closed on 7/31/2012 at price of $1.40 with a 75.00% gain in 1 days.

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