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 potentially avoid a $16 billion tax bill if it merges with rival AOL, Inc. (NYSE:AOL), activist investor Starboard Value claims. Several...
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