Often overlooked in favor of flashier Chinese retail stocks, JD.Com Inc(ADR) (NYSE:JD) is a sleeping giant. So far, Alibaba Group Holding Ltd (NYSE:BABA) has hogged most of the limelight on this front. But traders are missing out on a very lucrative opportunity by ignoring JD stock.

JD.com may be the current No. 2 Chinese e-commerce company, but that doesn’t mean it’s lacking in any way, shape or form.

While overshadowed by Alibaba’s presence in the financial media, JD is still expected to grow revenue at a clip of 50% year-over-year through 2020 — a figure that may be on the conservative side.

There’s no doubt that Chinese e-commerce stocks are growing at an insane clip. In fact, China’s e-commerce market is forecast to grow roughly 50% through fiscal 2018, with $1.5 trillion in sales projected next year. What’s more, the company is partnering with Wal-Mart Stores Inc (NYSE:WMT) stateside, which improves the outlook for JD stock.

Investors will get another peak at JD.com’s financials next month. The company is expected to report third-quarter earnings some time near Nov. 13. Expectations call for the company to post a profit of 11-cents-per-share, up from earnings of just 3 cents-per-share last year.

Revenue is expected to rise 37.8% to $12.64 billion. Historically, JD.com has had no trouble meeting these forecasts in the past year, beating Wall Street’s targets in each of the past five reporting periods.

Expectations are running high within the brokerage community for JD stock. According to Thomson/First Call, 26 of the 35 analysts currently following the stock rate its shares a “buy” or better.

The 12-month consensus price target rests at $50.78.

Click to EnlargeMeanwhile, JD stock options traders are just as bullish on the shares’ prospects. Currently, the November put/call open interest ratio comes in at 0.58, with calls nearly doubling puts among options most affected by next month’s quarterly report.

Overall, November implieds are pricing in a potential post-earnings move of about 8.9% for JD stock. This places the upper bound at $42.46, while the lower bound lies at $35.54.

A post-earnings rally would put the stock back above its 50-day moving average — a move that could spark heavy follow through buying from technical traders.

Meanwhile, a drop to the $35 region would put JD in bear-market territory, below its 200-day moving average. With the red-hot growth prospects for Chinese e-commerce, I can’t see a break below this long-term trendline unless JD.com offers up a horrendous quarterly report.

Two Trades for JD Stock

Call Spread: Traders looking to take advantage of the recent decline in JD stock ahead of earnings might want to consider a November $41/$42 bull call spread. At last check, this spread was offered at 24 cents, or $24 per pair of contracts. Breakeven lies at $41.24, while a maximum profit of 76 cents, or $76 per pair of contracts — a potential return of 216% — is possible if JD stock closes at or above $42 when November options expire.

Puts Sell: If Chinese geopolitical concerns are weighing on your outlook, then a more neutral-to-bullish strategy might work better for your risk tolerance. Along those lines, a November $35 put sell is a good starting place. At last check, this put was bid at 35 cents, or $35 per contract.

As long as JD stock trades above $35 through expiration, traders pursuing this strategy will keep the $35 premium. However, if JD trades below $35 ahead of expiration, you could be assigned 100 shares for each contract sold at a price of $35-per-share.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.