Play Recent Yahoo! Inc. (YHOO) News With Options Says Susquehanna

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Mark Melin
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Updated on

Susquehanna Financial Group, a leading options trader, is recommending a “stub” spread trade in Yahoo! Inc. (NASDAQ:YHOO) options to play “tax optoinality” on a nearly $16 billion gain in the stock price of Alibaba Group Holding Ltd (NYSE:BABA), which Yahoo owned. The options firm, historically known for its options market making skills, is recommending buying the 41 call vs. selling the 46 call in a long bull spread as a way to minimize cost/volatility exposure, while also taking advantage of the low skew in the stock options. Tax advantages for Yahoo after a merger with AOL Yahoo! Inc. (NASDAQ:YHOO) can…

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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.