 This stock is known as the Netflix of China if you haven't heard there's been a big sell-off in Chinese equities Could this be an opportunity to take advantage of upside in the Netflix of China the stock is IQ? Let me show you a little bit about the company their earnings or cash flows and then an options way to play it That will give you upside and cap the risk First I'll show you the monthly chart IQ which is a Chinese stock very risky not for everyone, but there's something about this that screams opportunity to me It's beat up used to be in the 4050 Range well the highs were there's a there's a big cluster around 20 and it's been even below $3.50 right now. That's where it's standing. Let's look at the business I'm using seeking alpha to look at some of the data if you look their forward PE is 8.66 that is cheap they make 40 cents forward EPS per share Healthy earnings. It's finally profitable. It wasn't before but now it's making money It's a 3.3 billion dollar business. Let's look at the analyst expectations for earnings Again looking at seeking alpha. This is IQ symbol and these are the premium earnings Information that I sign up for if you look Not only is the PE healthy, but earnings are growing Average around 15 to 20 percent per year now I grew it out for five years and my assumptions say that this could be a healthy growing company and somewhere between 40 and $90 even so part 2 is how do you play it given this information? I'm just gonna use e-trades option Table here. I'm looking at the June 2024 options and I'm already in the three calls. Yes, I'm already in this trade I don't recommend this type of trading for everyone but for educational purposes This is how and why I would do it the three strike is Isn't was slightly in the money when I put the trade on and it gives me leverage I think I put it on for a little bit less than this and I get all the upside and my risk is Limited to the principle that I pay because this is a call for six months Let's say I pay 80 cents. That's 380. Yes, I'm risking 80 cents, which is a slight premium But I get to control the shares which are worth $3.50 for 80 cents now As you know, every option is for 100 shares. So you multiply it by 100 This is an $80 option and the stock is Times 100 would be $359 instead of using $359. I'm only using $80 because I use the call The idea is if the stock runs and takes off I could close it for a gain or I could exercise and just keep the shares and let the stock keep going because remember The thesis is if this is a short term bottom, there is a lot of upside and I want to keep owning the business That's the thesis. That's the idea and We'll finish with the chart. So again, here's the chart 359 is the current price If I use the three strike options I'm hoping this trade works Works out for many years not just six months maybe Five to ten years. So the way I would do it is Exercise or close and reopen to another option But if you look somewhere between the 16 and 20 level, I would love for the shares to go up there Then I got a good entry Maybe an inverse head and shoulders. Who knows but I like the business. It's cheap There is risk to anything in china. There's geopolitical risk. There's trade risk There's currency risk a lot of things can go wrong So I would keep this to a small position in my accounts I don't want to risk all of my account and I especially don't want to do that in call options because If the stock goes below three then the trade could get wiped out That's my thinking. That's my logic. If you have any questions or comments, leave them down below and please like and follow. Cheers