Bonawyn Eison spoke Wednesday afternoon on CNBC's "Options Action" about unusually high options activity in Alibaba Group Holding Ltd - ADR (NYSE:BABA). He said calls outpaced puts by about three times to one, but some of that was in spread action.
The options market is implying a 5% move in either direction between now and Friday expiry, said Eison. The average move over the last four quarters is 2.5%.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
One trade caught Eison's attention. Around 13,000 contracts of the August 21, $260/$265 call spread were traded for $2. The trade breaks even at $262 or 0.5% above the closing price on Wednesday. If the stock jumps to $265 or higher after earnings, the trade would reach its maximal profit of $3.
On Thursday morning, Alibaba reported quarterly earnings of $2.10 per share, which beat the analyst consensus estimate of $1.99. The company reported quarterly sales of $21.76 billion, which beat the analyst consensus estimate of $21.34 billion.