A Look At How BABA Options Are Trading
by Option Review - October 6th, 2014 5:07 pm
Alibaba (Ticker: BABA) options have been trading for one week. Let’s take a look at where options traders have accumulated the most positions in BABA call and put options. Per the below chart, the 90.0 strike calls and puts are by far the most held options contracts across all available expiries on the Chinese e-commerce giant. All told, it looks like there are approximately 52,000 contracts held at the 90.0 strike level, or roughly 17% of total open interest on the name of 312,000 contracts. The call/put interest ratio of approximately 1.5 on Alibaba indicates more of the open interest held of investors is in call options versus puts on the stock. Shares in BABA today are roughly flat on the session to stand at 88.20, and options traders have exchanged a little more than 22,000 contracts versus the stock’s average daily options volume of 99,000 contracts.
Chart – BABA Open Interest as of 10/06/14
Fabulous Friday – Our AliBaba Play Pays off Big!
by phil - September 19th, 2014 7:26 am
We're already up over 100% on Alibaba.
How, you may wonder? Well, two ways: Back in October of 2007, before Alibaba IPO'd in China, I was touting the company when it had an $8Bn valuation ($1.10 per share – pre-split). I was the first and only analyst in the US to point out the benefits of Yahoo's investment back then and our Members who play the Asian markets were able to take advantage of that and today should be the culmination of the white whale of investing – the 20-bagger as Alibaba is expected to IPO in the US at $160Bn just 7 years later.
YHOO, on the other hand, took the long and winding road but it should finally be getting to our $50 target and that's another 100% gain on the stock – though a very small consolation to those who didn't pick up AliBaba directly. Fortunately, at Philstockworld, we know how to BE THE HOUSE – Not the Gambler and, back in June, when the rumors of the AliBaba IPO began we came up with a way for our Members to make 400% playing YHOO into the AliBaba IPO.
From our Live Member Chat Room:
Submitted on 2014/06/30 at 12:03 pmYHOO/Albo – Why not just buy YHOO? YHOO is $35Bn and owns 22% of AliB while SFTBY is $91Bn and owns 33% of AliB, so you get a lot more bang for your buck with YHOO, whose forward p/e is only 19, than SFTBY, whose forward p/e is about 17 – so not all that significant. Of course, more significantly is the potential impact of (guessing) $50Bn worth of AliB on a $35Bn company!
So we don't even have to go crazy if we want to play the "YHOO is undervalued" game. The Jan $38/45 bull call spread is $1.60 on the $8 spread with 400% upside if YHOO gains 28%. I think that's worth $800 for 5 shares in the $25KP
Meaningless Monday – Waiting for Yellen to Testify Tomorrow
by phil - July 14th, 2014 8:25 am
We're got our strong bounces on Friday – now we'll see if they hold up! .
As you can see from our big chart, we still have Spitting Cobra patterns forming on all but the Russell, which has turned into a Vomiting Cobra, spilling all the way down to the 50 dma at 1,150. We're still below the Weak Bounce Line on the NYSE – so we'll watch that closely and the Russell needs to get over their Strong Bounce at 1,170 to confirm:
- Dow 17,050 to 16,800 is 250 in 3 days so you need to make a strong bounce in 1.5 days in order to have a chance at a V recovery. Bounces would be 50 points so 16,850 and 16,900 are what we'll watch.
- S&P 1,985 to 1,955 is 30 points so 6-point bounces to 1,961 and 1,967 will be our targets.
- Nasdaq 4,485 to 4,360 (now I'm rounding) is 125 so 25-point bounces to 4,385 and 4,410.
- NYSE 11,100 to 10,900 is 200 points so 40-point bounces to 10,940 and 10,980.
- Russell 1,208 to 1,140 is 68 points and we'll call that 14-point bounces for 1,155 (rounding) and 1,170.
Also key, of course, is the 3 of 5 red signals on our Must Hold line on our Big Chart™ - only the NYSE is likely to make it over today, with a 64-point move (0.5%) taking it back to 11,000 – certainly that's not asking too much before we flip to some more bullish betting, is it?
We still have 29 stocks on our Buy List (Members Only) and, since they dynamically update, it's very easy to see that about 1/2 of them haven't gotten away yet and are still playable for dip buying. We also have 29 more stocks from our old Long-Term Portfolio, which we liquidated on May 29th – and that is full of great trade ideas as well.
We just did Week 4 for our our May Trade Review over the weekend and we slipped to 73% that week (ending 5/23) which brought us down to 84% for the month with 158 out of 197 trade ideas on the winning side. Still, going from 125-17 to 158-29 was an early indicator that we were losing…