Alibaba Investors, Speculators Pile Onto $100 Call Options as Shares Climb
$Alibaba (BABA.US)$ investors and speculators are piling into call options that give the holders the right to buy its American depositary shares at $100 each after Tuesday's rally took the ADSs to the highest in more than a year.
As of 12:16 p.m. in New York Tuesday, more than 98,500 call options with the $100 strike price changed hands across 19 expiration dates that stretch through Jan. 15, 2027, according to data tracked by moomoo. That's more than a quarter of the 390,360 Alibaba put and call options traded so far. The total volume makes Alibaba the third most active options, behind $NVIDIA (NVDA.US)$ and $Tesla (TSLA.US)$ and puts the ADS ahead of $Apple (AAPL.US)$.
Alibaba shares jumped as Chinese stocks rallied after the Asian government announced measures to boost its domestic stock market. These included allowing institutional investors to access central bank financing to buy equities. Authorities are also considering setting up a market stabilization fund. The initiatives could unleash at least 800 billion yuan or more than $113 billion in initial liquidity support, according to a Bloomberg report.
The ADSs of the Chinese tech giant that operates e-commerce, cloud, digital media and entertainment advanced 6.9% to $96.34 around noon time in New York. That rally pushed the $100 Alibaba calls closer to being in-the-money.
The heaviest call options volume with that strike price are in calls expiring on Oct. 18, with 27,370 calls traded so far, more than double its open interest. The price of those $100 calls expiring in 24 days quadrupled.
Capital trend data showed inflows into Alibaba outpaced outflows by $99.5 million. That could help trim the fourth straight monthly net outflow from the stock.
Amid the rally, 10 of the 15 technical indicators tracked by moomoo are flashing warning signals that the stock could be overbought, and the trend could turn bearish.
Share your thoughts on Alibaba in the comment section. And if you have a price forecast, please vote below.
And you can find the rest of my options column here.
And you can find the rest of my options column here.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Luzi Ann Santos
Moomoo Senior News and Community Manager
Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
6131Followers
17Following
17KVisitors
Follow
71098415 : Blue okay. A.! ,? The h
Bullish Law : good
Laine Ford : I have done stock very good stock good
Laine Ford : I have done stock I like all done stock
Adrianlim90 : good
Adrianlim90 : a
Laine Ford : all good stock to hold now
104247826 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")