TheOptionPlayer.com sets up an Alibaba Group (NYSE: BABA) short-term (15-day) option strategy (Based on Wednesday’s closing quoted bid/ask prices)
The difference between funds paid out and received is a $2.15 per share debit maximum risk for this trade. The maximum profit is approximately $7.85 per share (approx. 350%) if Alibaba Group moves higher prior to the option contract expiration date. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
Why we recommend it:
• As evidenced in the chart below, technology stocks sold off the past week as investors took profits and rotated in cyclical and financial stocks.
• Right on queue shares of Alibaba Group (NYSE: BABA) are starting to ricochet higher off a firm long term support level.
• BABA shares gapped up today to signal follow-through on technical indicators pointing to a recovery bounce after being oversold.
• Also pushing Alibaba stock higher today is start of positive reviews from market analysts.
• Ford announced that it is set to reach a deal with BABA to sell cars online in China. This deal can be expected to provide a boost to the stock price.
• Alibaba shares are setting up for a relatively low risk, high profit opportunity if the price continues moving higher.
52-Week High: $191.75
52-Week Low: $86.01
Regular www.theoptionplayer.com subscribers can attest to the preponderance of successful trades published on this website.