2 China-Based Stocks Lower After GDP Report

BABA and JD marked fresh lows today, but have been blitzed by call traders lately

Deputy Editor
Jan 17, 2024 at 3:02 PM
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China-based stocks are moving lower today, after China's gross domestic product (GDP) data expanded by 5.2% in the fourth quarter, missing Reuters estimates but coming in slightly higher than the Chinese government's anticipated 5% reading. The country's disappointing 2024 outlook is weighing on equities as well, with Hong Kong's Hang Seng closing at its lowest level in roughly 15 months on Wednesday. 

Both JD.com Inc (NASDAQ:JD) and Alibaba Group Holding Ltd (NYSE:BABA) are suffering notable losses. BABA is trading at fresh 52-week lows, last seen down 1% at $68.74, while JD's plummet has brought it to five-year lows -- down 5% at $22.40 at last check. The tech stocks were both in an extended slump ahead of today's price action too, on track for their 8th loss in the past nine days. 

BABA bulls are likely displeased with this turn of events. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day call/put volume ratio of 5.39 ranks higher than 99% of readings from the past year, meaning calls have been much more popular than usual. There's a similar call-heavy skew in JD's options pits, where roughly four calls have been exchanged for every put in the last two months, per ISE, CBOE, and PHLX data. 

It's also worth noting that Alibaba stock is seeing reasonably priced premium at the moment, per its Schaeffer's Volatility Index (SVI) of 35%, which ranks in the low 17th percentile of its annual range.

 

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