HomeMarket NewsMaximize Investments with April 12th Options on Alibaba Group Holding (BABA)

Maximize Investments with April 12th Options on Alibaba Group Holding (BABA)

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New Options Opportunities Unveiled for Traders

Options trading has heated up for Alibaba Group Holding Ltd (Symbol: BABA) with the recent launch of new contracts set to expire on April 12th. At Stock Options Channel, we eagerly examined the BABA options chain and pinpointed a put and call contract deserving of attention.

Unleashing the Power of Put Contracts

Delving into the $73.00 strike put contract, investors are looking at a bid of $2.68. By opting to sell-to-open this put contract, investors commit to acquiring the stock at $73.00 while pocketing the premium. This move could potentially lower the cost basis of the shares to $70.32, offering a compelling option compared to the current $74.17 market price. Standing at a 2% discount from the current stock price, the odds of this put contract expiring worthless come in at a staggering 99%.

Exploring the Call Side of Options

Switching to the calls domain, the call contract seated at the $75.00 strike presents a bid of $3.10. Investors purchasing BABA shares at $74.17/share, then selling-to-open this call contract as a β€œcovered call,” will commit to selling the stock at $75.00. This strategic move could achieve a total return of 5.30% if the stock is called away at the expiration on April 12th. However, there’s a chance that significant upside potential remains untapped if BABA shares rally. Analyzing BABA’s trading history and business fundamentals becomes crucial in making informed decisions when dealing with these options.

Understanding the YieldBoost Potential

Should the $75.00 strike covered call contract become fruitless, investors retain their stock along with the premium collected. With the current odds of this happening placed at 99%, the premium could provide investors with a 4.18% boost in additional returns. Calculations show a trailing twelve-month volatility of 39%, adding another layer of insight to investor strategies. For more enticing put and call options contract ideas, make sure to visit StockOptionsChannel.com.

nslideshowTop YieldBoost Calls of the S&P 500 Β»

Also see:

Β• Funds Holding SNDE
Β• IMGN YTD Return
Β• ZBH Average Annual Return

The perspectives and reflections shared here represent the views and opinions of the writer and may not align with those of Nasdaq, Inc.

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