Buying BABA call contracts.

Alibaba Group (BABA) is an online Chinese e-commerce company with strong (and growing) profits.

Chinese stocks have pulled back sharply this year due to the overall bear market, lockdowns in China and some political stress as China’s leaders balance socialist agendas with the need for economic growth.

The political tide is now shifting more towards the need for growth, and covid restrictions are becoming less of a risk.

Shares of BABA have begun to trade higher in response. And the stock is still cheap compared to the company’s underlying profit.

This leaves plenty of room for BABA to move higher now that the risks are starting to ease.