Press "Enter" to skip to content

Mike Khouw Sees Buying Opportunity In Alibaba Pullback

Mike Khouw said on CNBC’s “Options Action” that a pullback in Alibaba Group Holding Ltd – ADR (NYSE: 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.

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

This post was originally published on this site

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *