On CNBC’s “Options Action,” Mike Khouw suggested that investors with a long position in Alibaba Group Holding Ltd – ADR (NYSE: BABA) should consider a less risky alternative going into earnings.Khouw wants to sell the September $235 put for a credit of $8 and buy the September $260/$285 call spread for total cost of $7. With the options structure, he collects a premium of $1. If the stock rallies through $285, Khouw is going to make a profit of $26 or a little over 10% of the current price. If the stock drops below $235, he would have to buy …read more
Source:: Yahoo Finance
