Exploring Put Contracts for Alibaba Group Holding Ltd
Investors immersed in the thrill of stock options may have noticed a new wave of options emanating from Alibaba Group Holding Ltd (BABA) today, tailored for the May 31st expiration rendezvous. Stock Options Channel, our trusty companion in deciphering the dance of options, has engaged in an intricate pas de deux with the BABA options chain, unveiling one put and one call contract that are particularly captivating.
The put contract stationed at the $68.00 strike is currently beckoning at a bid of 54 cents. By venturing into a sell-to-open stance on this put contract, investors are enrolling in a commitment to seize the stock at $68.00. Nevertheless, they shall also bask in the sweet premium, hence revering their cost basis of the shares at $67.46 (before yielding a portion to broker commissions). For investors ogling shares of BABA, this may sidle up as an enticing alternative to the prevailing $74.58/share.
Could this $68.00 strike, lounging approximately 9% below the current trading price, prove to host an exhilarating affair of turning worthless? The swirling vortex of analytical data (boasting of greeks and implied greeks) intimates that an 78% probability shrouds this possibility. Stock Options Channel vows to monitor these swirling odds as they pirouette through time, adorning its website with a tapestry of numbers, encapsulated under the veil of the contract detail page. If the contract bid a final adieu to its worth, the premium would constitute a 0.79% yield on the cash pledge, or a tantalizing 5.80% annual dose of succulence — an offering we fondly dub the YieldBoost.
Embracing Call Contracts to Unveil Potential for BABA
The call segment beckons with a contract perched at the $80.00 strike, inviting investors with a current bid of $2.53. By nuzzling close to the current stock price of $74.58/share and delving into a sell-to-open waltz on this call contract as a “covered call,” investors pledge to ebb into a commitment to vend the stock at $80.00. This romantic tango transpires as a wellspring for a total return (sans the allure of dividends) of 10.66% when the stock pirouettes away at the May 31st deadline (before rendering homage to broker commissions). However, this dalliance may forge the fate of relinquishing potential benefits if BABA shares crescendo in a leap of joy, unshackling unclaimed spoils.
Perchance, could the $80.00 strike — dangling as a 7% premium above the stock’s current trading price — whisper in the ears of futility as the covered call contract descends into nothingness? Observant of the swirling vortex of analytical data (embodying greeks and implied greeks), a 62% probability envelops this cocoon of possibility. Stock Options Channel affirms its commitment to shadow these odds as they bask in the spotlight of time, unfurling a canvas of numbers on its domain. Should the covered call contract give up its ghost, the premium shall burgeon as a 3.39% enhancement of additional yield to the investor, or an ebullient 24.76% annualized boon christened the YieldBoost.
Effervescent whispers tell of an implied volatility aglow at 40% in the put contract theater, while the call contract stage dazzles under an implied volatility aureole of 42%. As daylight dances upon the actual trailing twelve-month volatility (embracing the last 251 trading days’ closing values in the arms of today’s price of $74.58), it unveils itself to be a 35% spectacle. For a rendezvous with more put and call options worth exploring, the portal to enlightenment lies in the embrace of StockOptionsChannel.com.
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