I closed my position in QIHU last week for a loss of $591.10. The loss was within my risk tolerances but for an option trade I should have adopted a smaller risk profile on this one. I wisely hedged the position once it started to move against me. But I probably would have been better off hedging with stock instead of shorting the 17.5 puts with a lesser amount.
This was a stock that I fell victim for the anticipated "home run" as there were numerous articles claiming this is a fraud.
Anyway the stock just went parabolic. However, It's one to watch because there is divergence on this move and lower volume. That being said, I'm not going to stand on the tracks of a freight train and hope it slows down. If I decide to short it will be on the next spike following a pull back. If it cannot push the MACD and the RSI shows a divergence then and only then will a short position look attractive.