Kevin Kelly's Paypal Options Trade

Kevin Kelly of Recon Capital Partners spoke on Bloomberg Markets about Paypal Holdings Inc PYPL.

He thinks that traders who missed on a move of Amazon Web Services can buy Paypal. He explained that the company provides financial backbone for all the start ups and also for ecommerce.

Kelly thinks it would be a good idea to buy the stock and sell the October 47 call against it for $1.25. The short call position offers a 2.93 percent downside protection. If the stock trades above $47 at the October expiration, the selling price would be capped at $48.25 or 13.05 percent above the closing price on Tuesday.