Q2 STOCKS TO BUY

Pre-Earnings Call Buyers Blitz Alibaba Group Holding Limited (BABA)

Alibaba Group Holding Ltd (BABA) will report earnings ahead of tomorrow's open

Jan 28, 2015 at 1:53 PM
facebook X logo linkedin


Option bulls have been active on Alibaba Group Holding Ltd (NYSE:BABA) in recent weeks, as the firm prepares to tell all in the earnings confessional ahead of tomorrow's open. Specifically, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 1.66 calls for every put during the past 10 sessions.

It's a similar set-up in today's trading, with calls crossing the tape at nearly three times the average intraday rate, and outpacing puts by a 2-to-1 margin. Receiving notable attention has been BABA's weekly 1/30 100- and 105-strike calls, and signs suggest some of the activity is of the buy-to-open kind. By initiating the long calls, speculators expect BABA to be sitting atop the respective strikes by week's end, when the series expires.

Tomorrow morning's fiscal third-quarter earnings report marks just the second time BABA has taken its place on the earnings stage since going public last September. In the wake of its previous quarterly report in early November, the stock tacked on 4.2% in the subsequent session. This time around, the options market is projecting a bigger move of 6.6%, but considering the weekly 1/30 100-strike put and call are pricing in similar implied volatility, it's unclear as to which direction the action is expected to resolve itself.

Today, the shares are roughly 2.8% lower at $100.12, amid news of a public squabble with Chinese regulators over BABA's handling of illegal businesses on its platform. This comes on the heels of yesterday's uninspiring announcement from the company's entertainment division. Elsewhere, Yahoo! Inc. (NASDAQ:YHOO) said late Tuesday that it will spin off its massive stake in Alibaba Group Holding Ltd (NYSE:BABA) into a separate entity.

Daily Chart of BABA Since September 2014
 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter