After moving lower, Alibaba (BABA) is beginning to move higher… fast.
Consider closing out the BABA January 82.50 put at a loss… and let the BABA January 90 calls run higher. The underlying stock is now up to $94.30, giving us more than 50% on that side of the trade.
Days after our recommendation, Bank of America, Merrill Lynch, Brean Capital, and UBS all initiated coverage of the stock with prices targets ranging from $100 to $112. I’d like to see BABA well over $120 by January 2015. There are arguments being made for a trillion dollar valuation with this beast.
While holding the call side of the hedge, consider buying to open the BABA April 2015 105 calls up to $5.60. I want to make you rich with many, many BABA trades over the next year.
After closing out 15 winning positions since September 19, losses do exist, but hold them all.