How to Play Yahoo

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Oct. 15 (Bloomberg) -- Bay Crest Partners' Anshul Agarwal discusses his options play for Yahoo on Bloomberg Television's "Market Makers." (Source: Bloomberg)

In the meantime, we are going to drill down into derivatives.

After today's close, yahoo!

Reports its third-quarter results.

My guest has his options strategy.

You have been bullish on yahoo!

For some time because of it stakes in alibaba and yahoo!

Japan.

How do you want to be positioned?

I want to be paid to wait.

Given that alibaba is planning to sell in an ipo.

The two things that are going to be good for the selloff would be the fact that they would be listing shares in the u.s. and hopefully yahoo!

Can sell off its stake in a self-sufficient way.

What would be your strategy?

My strategy is pretty straightforward.

Selle put spread.

Implied volatility is quite high.

So two things combined with our bullish stance.

I would like to sell the spread and yahoo!

And collect one dollar and a half.

The most risk is $2.5 and i stand to make $1.5. it makes sense your a little bit tempered on this.

How much more upside is there in a company like this when the core business come a search, is trailing.

Core business is definitely trailing.

They are losing to google and facebook.

The upside is dependent on the valuation for alibaba.

Analyst estimates say it can be in the mid 20s to mid ready fives depending on where alibaba prices itself.

That gives me a very strong support great you don't see the ipo this year?

I do not.

That's why i'm using december options.

We are on the markets once again in just nerdy minutes.

Lunch money is up next.

This text has been automatically generated. It may not be 100% accurate.

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