Baidu Inc (ADR) (NASDAQ:BIDU) stock is indeed a fallen angel. It is down 15% since mid-march, but it’s not alone. Most mega caps like Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) to name a few are down just as much.

The NASDAQ was hit hard and it had its effect on stocks like BIDU. While investors were already nervous in general and stocks are under pressure from political unrest, headlines of data breaches and misuse broke out and exacerbated the selling frenzy in the sector.

First, we learned that a FB vendor misused its user data and management fumbled the situation and inflamed the headlines. Then, more recently, Citron research accused TWTR of even worse shenanigans, which have since been denied by the company. Finally, just yesterday, CNBC aired rumors about the White House intentions to hit Amazon with special tax laws and the stock fell 5%.

At this point, it feels like a witch hunt, but I do have to respect the effects. For example the Amazon.com, Inc. (NASDAQ:AMZN) news is old, but the mere mention of it on CNBC caused a massive dip in market cap. This effects all tech investors. As much as I would like to ignore the headlines and just trade the fundamentals, I do have to deal with their effects until this malaise abates.

So, instead of buying the stock outright and risk $220-per-share with absolutely no room for error, I will use options where I can build a buffer between the current price and my risk. In other words, I have more faith in proven downside support in Baidu stock, then immediate upside hopium.

I would also be using the elevated levels in the CBOE Volatility Index (INDEXCBOE:VIX). I am selling premiums into higher levels than normal. The thesis here is that after all these headlines die, fundamentals will matter once more.

BIDU stock is not bloated. It has a trailing 12 months price-to-earnings ratio of 27, which is fair for a proven growth stock. So owning BIDU shares at an even deeper discount than now is not likely to be a major Financial faux pas.

Technically, I have to account for an even worse situation than now just to be on the safe side. Prices around $190-per-share are important. This zone is a pivot level that dates back to 2013. In July of 2017, the stock rallied 35% off it after an extremely bullish earnings report where management told a great story going forward. I have no reason to believe now that this was a mistake.

But even if it fails, there is another similar Pivot Point around $155-per-share, which dates even further back to 2011. So from here, I believe that the bears will need much worse news in order to sell Baidu stock through these levels.

The Trade: Sell the BIDU SEP $150 naked put and collect $1.50 to open. Here, I have a 90% theoretical chance that I would retain maximum gains. But if the price falls below my strike, then I would accrue losses below $148.50.

Selling naked puts is daunting, especially when equity markets are this nervous. Those who want to mitigate that risk can sell spreads instead.

The Alternate Trade: Sell the BIDU SEP $155/$150 credit put spread. The spread has the same odds, but it would deliver 15% yield on risk. Neither trade requires a rally to profit. In fact, the stock can fall an additional 33% and I could still retain maximum gains.

Get my free newsletter and subscribe to my YouTube channel here. Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on twitter and stocktwits.