TD Ameritrade Chief Strategist On Alibaba: Options Volatility Suggests A 5.5% Move After Earnings

Speaking to Benzinga, TD Ameritrade Chief Strategist JJ Kinahan observed that Alibaba Group Holding Ltd BABA stock is trading about 2.25 times a normal day while options are trading about 3.5 times normal ahead of its earnings release on Thursday.

Looking at the volatility in the options market, Kinahan commented that the market is anticipating an approximate 5.5 percent move in the stock (up or down) after the earnings release.

Kinahan noted that traders have taken significant positions in the $105 Calls and the $90 Puts.

“There’s just over a 53 percent probability we’ll touch [the $105 Call strike price] between now and Friday and on the [$90] Puts there’s only about a 22 percent chance we’ll touch there” by Friday, according to Kinahan

Kevin Riley and Brianna Valleskey contributed to this report.