Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>Over the past five trading days, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.</li>
<li>
Popular Strategies: Over 35% of all strategies are Calendar or Diagonal Spreads. Bullish and bearish views prevail at equal rates, with very few market-neutral views expressed.</li>
<li>
Top Trades: Some market participants were betting on a short term re-bound after the post-earnings drop. Others take a bearish view with finely calibrated medium-term hedges. Trade-examples are presented.</li>
</ul>


Over the past five trading days, Alibaba Group Holding (9988 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.

Popular Strategies: Over 35% of all strategies are Calendar or Diagonal Spreads. Bullish and bearish views prevail at equal rates, with very few market-neutral views expressed.

Top Trades: Some market participants were betting on a short term re-bound after the post-earnings drop. Others take a bearish view with finely calibrated medium-term hedges. Trade-examples are presented.


Alibaba (9988 HK): Unpacking the Week's Savvy Top Options Trades

<ul>
<li>
Implied Volatility Trends:<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding's (9988 HK)</a> one-month implied volatility has significantly receded to the 37th percentile after its 15 May earnings, reflecting a substantial implied vola crush.</li>
<li>
Skew and Term Structure Dynamics: The implied volatility term structure is now slightly upward-sloping with longer-dated options commanding a small premium. Skew dynamics indicate cheaper puts.</li>
<li>
Open Interest Distribution: Liquidity is greatest in the June and September expiries. Short term strikes are concentrated near or at the money.</li>
</ul>



Implied Volatility Trends:Alibaba Group Holding's (9988 HK) one-month implied volatility has significantly receded to the 37th percentile after its 15 May earnings, reflecting a substantial implied vola crush.

Skew and Term Structure Dynamics: The implied volatility term structure is now slightly upward-sloping with longer-dated options commanding a small premium. Skew dynamics indicate cheaper puts.

Open Interest Distribution: Liquidity is greatest in the June and September expiries. Short term strikes are concentrated near or at the money.


Alibaba (9988 HK): Navigating Post-Earnings Volatility

<ul>
<li>
Context: Stat-arb models flag <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a> as overvalued versus the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a>, with the difference between implied volatility and option premium at historically high levels.</li>
<li>
Highlight: An actionable trade setup — long HSI calls vs. short Alibaba calls — that captures relative value and introduces leverage through a ratio structure.</li>
<li>
Why Read: This is a timely opportunity to combine a directional view with favorable volatility dynamics, offering asymmetric payoff potential.</li>
</ul>



Context: Stat-arb models flag Alibaba (9988 HK) as overvalued versus the Hang Seng Index (HSI INDEX), with the difference between implied volatility and option premium at historically high levels.

Highlight: An actionable trade setup — long HSI calls vs. short Alibaba calls — that captures relative value and introduces leverage through a ratio structure.

Why Read: This is a timely opportunity to combine a directional view with favorable volatility dynamics, offering asymmetric payoff potential.


Alibaba (9988 HK) Vs. Hang Seng Index (HSI INDEX): Relative Value Options Play with Leverage

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Equity Bottom-Up

<ul><li>Alibaba Cloud is doubling down on globalization with a bold new strategy and 380-billion-yuan ($52.7 billion) investment plan aimed at creating a unified global cloud network and accelerate the international rollout of its AI offerings.</li><li>The initiative seeks to establish Alibaba Cloud as the digital backbone for China’s next generation of global companies.</li><li>Speaking at the Alibaba Cloud “Go Global Summit” on Thursday, Wu Yongming, Alibaba Group CEO and Alibaba Cloud chairman, said China’s globalization is entering a new era — one led not just by product exports but by the global rise of Chinese technology, brands and advanced manufacturing.</li></ul>

Alibaba Cloud is doubling down on globalization with a bold new strategy and 380-billion-yuan ($52.7 billion) investment plan aimed at creating a unified global cloud network and accelerate the international rollout of its AI offerings.The initiative seeks to establish Alibaba Cloud as the digital backbone for China’s next generation of global companies.Speaking at the Alibaba Cloud “Go Global Summit” on Thursday, Wu Yongming, Alibaba Group CEO and Alibaba Cloud chairman, said China’s globalization is entering a new era — one led not just by product exports but by the global rise of Chinese technology, brands and advanced manufacturing.

Alibaba Cloud Goes Global With $52 Billion Bet on AI and Infrastructure 

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Alibaba (BABA) reported C1Q25 top line in-line with our estimate and consensus. Taobao/Tmall (T/T) outperformed while Cainiao and Int’l commerce underperformed. </li>
<li>Stabilization of domestic e-commerce is a major positive. However, on-demand e-commerce at home and video e-commerce abroad are two global growth drivers, </li>
<li>We see new challenges emerging following business stabilization. We believe the management is up to the task. We keep BABA in our TOP BUY list and reiterate rating and TP.</li>
</ul>


Alibaba (BABA) reported C1Q25 top line in-line with our estimate and consensus. Taobao/Tmall (T/T) outperformed while Cainiao and Int’l commerce underperformed. 
Stabilization of domestic e-commerce is a major positive. However, on-demand e-commerce at home and video e-commerce abroad are two global growth drivers, 
We see new challenges emerging following business stabilization. We believe the management is up to the task. We keep BABA in our TOP BUY list and reiterate rating and TP.


[Alibaba (BABA US, BUY, TP US$150) Earnings Review]: Has Market Underestimated T/T Stabilization?

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba (9988 HK)

Alibaba (9988 HK): Unpacking the Week's Savvy Top Options Trades

Alibaba Group Holding's recent multi-leg option strategies show a mix of bullish and bearish approaches, with Calendar and Diagonal Spreads being...

Gaudenz Schneider

Alibaba (9988 HK): Navigating Post-Earnings Volatility

Alibaba's implied volatility drops post-earnings and displays a less smirky smile. Liquidity highest in June and September expiries.

Gaudenz Schneider

Alibaba (9988 HK) Vs. Hang Seng Index (HSI INDEX): Relative Value Options Play with Leverage

Alibaba IV is still about twice HSI IV, keeping the opportunity open for an asymmetrical relative value trade. Traders bearish on the HSI or...

Gaudenz Schneider

Alibaba Cloud Goes Global With $52 Billion Bet on AI and Infrastructure

Alibaba Cloud is doubling down on globalization with a bold new strategy and 380-billion-yuan ($52.7 billion) investment plan aimed at creating a...

Caixin Global

[Alibaba (BABA US, BUY, TP US$150) Earnings Review]: Has Market Underestimated T/T Stabilization?

Alibaba's C1Q25 top line meets expectations, with Taobao/Tmall performing well. Domestic e-commerce stabilizing, but on-demand and video e...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Alibaba (9988 HK): Unpacking the Week's Savvy Top Options Trades

​Alibaba Group Holding's recent multi-leg option strategies show a mix of bullish and bearish approaches, with Calendar and Diagonal Spreads being...

Gaudenz Schneider

Alibaba (9988 HK): Navigating Post-Earnings Volatility

​Alibaba's implied volatility drops post-earnings and displays a less smirky smile. Liquidity highest in June and September expiries.

Gaudenz Schneider

Alibaba (9988 HK) Vs. Hang Seng Index (HSI INDEX): Relative Value Options Play with Leverage

Alibaba IV is still about twice HSI IV, keeping the opportunity open for an asymmetrical relative value trade. Traders bearish on the HSI or...

Gaudenz Schneider

Alibaba Cloud Goes Global With $52 Billion Bet on AI and Infrastructure

Alibaba Cloud is doubling down on globalization with a bold new strategy and 380-billion-yuan ($52.7 billion) investment plan aimed at creating a...

Caixin Global

[Alibaba (BABA US, BUY, TP US$150) Earnings Review]: Has Market Underestimated T/T Stabilization?

​Alibaba's C1Q25 top line meets expectations, with Taobao/Tmall performing well. Domestic e-commerce stabilizing, but on-demand and video e...

Blue Lotus Research Institute

Alibaba Group Holding's recent multi-leg option strategies show a mix of bullish and bearish approaches, with Calendar and Diagonal Spreads being...

Alibaba's implied volatility drops post-earnings and displays a less smirky smile. Liquidity highest in June and September expiries.

Alibaba's C1Q25 top line meets expectations, with Taobao/Tmall performing well. Domestic e-commerce stabilizing, but on-demand and video e...