How to Play BABA Calls and Tap into Another Triple-Digit Profit Opportunity
Shah Gilani|May 11, 2021
Last Tuesday, I mentioned I liked buying the MRNA June 18, 2021 $165/170 Put Spread to take advantage of what looked like an opportunity for a quick reversal in Moderna, Inc. (NasdaqGS:MRNA).
By Thursday, just two days later, shares of MRNA had dropped as much as 23%, and the MRNA June 18, 2021 $165/170 Put Spread had gained more than 400%
I sure hope you were following along!
Today, I have a new opportunity for a quick move.
In yesterday’s watchlist, I mentioned that I liked picking up shares of Alibaba Group Holding Limited (NYSE:BABA) if the stock traded down to $220.
Well, here we are.
BABA traded down to $220 during Monday’s session and I think I see another triple-digit opportunity setting up over the next 5-10 days.
In case you’re not familiar with BABA, it’s basically the Amazon of China.
Last year, the company generated $78.58 billion in net sales. This year, that number is expected to reach $110.24 billion, which would be a 40.29% increase in a single year.
That’s huge!
At $220, shares of BABA are trading at support. The stock has held its ground in the $220 and $225 range twice this year, and I think it will hold again before turning around and trading higher.
Additionally, the company is scheduled to report earnings before the bell on Thursday. I think the numbers are going to look good – and I think that could give shares the catalyst they need to move higher off support.
I like buying the BABA June 18, $225/$230 Call Spread, which is trading for $1.90 as I write this.
At the current price, this trade has a 2.63-to-1 reward-to-risk profile.
No need to be greedy here. I like exiting the trade at a 100% profit.
If you have any questions about BABA or have stocks of your own that you want to know whether to buy, sell, or hold, drop me a line!
My new email shah@totalwealthresearch.com is open to question askers from all walks of life looking for a second opinion about stocks they are interested in. Then on Friday, I’ll record my answers in the next installment of the BS.H series.
I look forward to hearing from you!
Sincerely,
Shah
Shah Gilani
Shah Gilani is the Chief Investment Strategist of Manward Press. Shah is a sought-after market commentator… a former hedge fund manager… and a veteran of the Chicago Board of Options Exchange. He ran the futures and options division at the largest retail bank in Britain… and called the implosion of U.S. financial markets (AND the mega bull run that followed). Now at the helm of Manward, Shah is focused tightly on one goal: To do his part to make subscribers wealthier, happier and more free.