YuuZoo Pact a Boon to Alibaba Group Holding Ltd (BABA) Option Bulls

Bullish option traders foresee Alibaba Group Holding Ltd (BABA) extending its run past $80

Mar 30, 2016 at 10:45 AM
facebook X logo linkedin


Alibaba Group Holding Ltd (NYSE:BABA) has inked an agreement with YuuZoo Corporation to help it run the AliSports World Electronic Sport Games starting next month. The e-commerce stock has popped 1.1% on the news to trade at $78.93 -- a welcome sight for option bulls who have been eyeing the 80 strike.

Specifically, during the past 10 trading days, BABA has seen the biggest change in open interest at the April 80 call, which has added roughly 31,100 contracts. Based on data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), a large number have been bought to open -- suggesting traders foresee the stock toppling $80 by front-month expiration, at the close on Friday, April 15.

Taking a step back, short-term traders have displayed an extreme preference for calls over puts. BABA's Schaeffer's put/call open interest ratio (SOIR) stands at an annual low of 0.59 -- with calls nearly doubling puts among options expiring in the next three months.

Optimism is also reflected outside of the options pits. In fact, 83% of covering analysts rate BABA a "buy" or better, with not a single one handing out a "sell" opinion.

This glass-half-full approach makes sense in light of Alibaba Group Holding Ltd's (NYSE:BABA) rapid run higher. Since bottoming in February just below $60, the e-commerce stock has soared over 31%. What's more, during the past 40 sessions, BABA has outperformed the broader S&P 500 Index (SPX) by roughly 10 percentage points.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI