The future of Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) looks increasingly uncertain as options traders foresee a prolonged slump in its stock value.

Options traders are predicting more turbulence, with the options skew indicating increased bearishness just before Alibaba’s earnings report, which is scheduled for Wednesday. A put contract, betting on a further 10% drop in the stock by the end of April, was the most traded on Monday.

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Despite this, the shares saw an increase of up to 7% in Hong Kong on Tuesday, possibly due to optimism regarding positive earnings. Alibaba’s revenue for the last three months of 2023 is expected to have risen by 5.6% from the previous year, marking the slowest growth in three quarters due to challenging economic conditions and heavy discounting.

Despite these challenges, the company’s performance in its fourth-quarter earnings report could provide a much-needed boost for investors. The recent surge in Alibaba’s shares in Hong Kong amid the general market downturn suggests that some positive news may come on Wednesday.

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