Mike Khouw Sees Buying Opportunity In Alibaba Pullback

Loading...
Loading...

Mike Khouw said on CNBC's "Options Action" that a pullback in Alibaba Group Holding Ltd - ADR BABA presents an opportunity for people who had not gotten into a long position to do so. He thinks that Alibaba's financial results are still very good and recent issues might ultimately get sorted out.

To make a bullish bet, Khouw wants to buy the February $270 call for $19 and sell the December $285 call for $4. The total cost for the trade is $15 and it should benefit from the decay of the December $285 call over time, explained Khouw. If the December call is worthless at expiration, Khouw is going to have exposure to Alibaba through the February call, with a break-even at $285.

Carter Worth sees strong support for Alibaba at the 150-day moving average. He is a buyer of the stock.

 

Date of Trade
ticker
Put/Call
Strike Price
DTE
Sentiment
Posted In: OptionsMarketsMediaCarter WorthCNBCMike KhouwOptions Action
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...