Jim Strugger's Alibaba Trade

Jim Strugger spoke on Bloomberg Markets about a bullish options strategy in Alibaba Group Holding Ltd BABA.

He believes the positive momentum in the stock is going to continue and he expects to see more upside in the name. To make a bullish bet, Strugger wants to buy the January 2017 110/125 call spread for $3.90 and sell the January 2017 92.5 put for $2.76. The total trade costs $1.14 and it starts to make money if Alibaba jumps above $111.14 at the January 2017 expiration. Maximal profit is $13.86 and Strugger is going to have to buy the stock at $92.5 if it trades below that level at the January expiration.