Options traders are signaling for a move higher in shares of Yahoo, and the stock could shoot up 20 percent in the near future, OptionMonster.com's Pete Najarian said Monday.

Shares of Yahoo jumped more than 5 percent on Monday, closing at $41.81, as traders awaited the upcoming initial public offering of Chinese e-commerce giant Alibaba, of which Yahoo owns some 22.5 percent.

On CNBC's "Fast Money" on Monday, Pete Najarian laid out the bull case for Yahoo, saying that he's convinced the stock is "going to $50 per share."

According to Najarian, options traders have been pointing toward a move higher in the stock for some time. "I see the options activity has been telling this … this story was playing out when it was $18 and $20 a share, no one wanted to embrace it because they said, 'There's no growth in this company.'"

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Najarian said that Alibaba's upcoming IPO has shifted investor sentiment for Yahoo despite fears of slow growth.

"The longer people stare at Alibaba now that it's finally on the cusp of being an IPO, people are even more excited about this," he said.

—By CNBC's Michael Newberg