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What is the best way to trade Alibaba (BABA) IPO with YHOO?

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Guest

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Hi, what is the best way to trade Alibaba IPO with managed risk using YHOO options? Suggestion ? :)

Humble Hero Member

Humble

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You can probably do it in a similar way we trade earnings - buy a straddle and sell it just before the IPO. The problem is that you would not know if the straddle is cheap enough. Unlike our earnings straddles where we compare the price to previous cycles, in this case you have no reference.

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