Alibaba shares are down 6 percent in the last three weeks but some bulls are taking bets that it will see a rally in the coming month.
Though Alibaba dominates ecommerce in China, its stock has woefully underperformed that country's exuberant stock markets. The company's shares are down 15 percent year-to-date while the Shanghai Composite has soared 58 percent.
However, some traders are optimistic on Alibaba.
On Tuesday, as founder Jack Ma was in the U.S. pitching the site to businesses, bulls outnumbered bears in Alibaba's options by 2-to-1. One noteworthy bullish trade was a purchase of 1,200 contracts of the July 90-strike calls for a price of $1.65 each. Since each contract controls 100 shares, the trader is betting nearly $200,000 that Alibaba will close above $91.65 or 4.6 percent above Tuesday's close by mid-July.
A call is a bullish wager giving purchasers the right to buy a stock at set price within a given time frame.