Struggling Chinese Stock Popular Among Options Traders

Year-over-year, BABA is down more than 53%

Digital Content Manager
Jun 13, 2022 at 2:01 PM
facebook twitter linkedin


Alibaba Group Holding Ltd (NYSE:BABA) is sinking alongside the broader market today, last seen down 9.7% to trade at $99.15. The security's latest rally lost steam at the $121 level, with the shares today eyeing a move back below the 100-day moving average after briefly surging above the trendline last week. Now, BABA is pacing for its third-consecutive daily loss, and worst single-day percentage drop since March 14. Year-over-year, BABA is down 53.2%.

 

BABA 100 Day

What's more, Alibaba stock recently appeared on Schaeffer's Senior Quantitative Analyst Rocky White's list of names that have attracted the highest weekly options volume within the past two weeks. Per this data, 2,485,765 calls and 1,286,936 puts were exchanged in this two-week time period. The June 110  call was the most popular contract, followed by the weekly 6/10 110-strike call.

MAO 613

While calls outnumbered puts on an overall basis, the latter were picked up at a much quicker-than-usual clip over the last 10 weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the Chinese tech stock sports a 50-day put/call volume ratio of 0.45 that sits higher than 93% of other readings from the past year.

The brokerage bunch remains optimistic towards Alibaba stock, with nine of 11 analysts in question carrying a "buy" or better. What's more, the 12-month consensus target price of $163.10 is a 64.6% premium to current levels.

For those looking to weigh in, options look like a solid move at the moment. According to its Schaeffer's Volatility Scorecard (SVS) tally of 77 out of 100, BABA has consistently realized bigger returns than options traders have priced in over the last 12 month

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

SCHAEFFER'S JULY STOCKS REPORT AD
 


 


 
Special Offers from Schaeffer's Trading Partners