Expanding Horizons: New Options Unveiled for Alibaba
Today marks the commencement of trading for fresh options in Alibaba Group Holding Ltd (Symbol: BABA), set to expire on April 12th. Investors are seizing the opportunity as the options chain unfurls, with the potential for enticing returns on the horizon.
Delving into the Details
The arrival of the put contract at the $73.00 strike price has stirred interest, boasting a bid of $2.68. By venturing into selling-to-open this put contract, investors would step into a realm where they could acquire stock at $73.00, accompanied by pocketing the premium. A tantalizing prospect indeed, positioning the cost basis at $70.32, shedding light on an alternative to the current share price of $74.17.
Diving deeper, the $73.00 strike presents an approximate 2% markdown relative to the current trading price, implying that the put contract might expire futile. Statistical analysis hints at a staggering 99% possibility of such an outcome. With Stock Options Channel diligently monitoring the odds, investors can keep a close eye on the evolving probabilities, encapsulating this insight in a chart for reference.
Deciphering the Call Side
Transitioning to the calls facet of the option chain, the $75.00 strike call contract is emerging as a prominent player, flaunting a bid of $3.10. Investors considering purchasing BABA shares at $74.17 and then opting for a covered call at $75.00 are embarking on a journey where they agree to sell the stock at the specified price. This strategic move could yield a total return of 5.30% if the stock gets called away by the April 12th expiration.
As the $75.00 strike bears a 1% premium to the present share price, a scenario where the covered call contract fizzles out remains a possibility. Current data points to a 99% likelihood of such an event. Stock Options Channel will meticulously track these probabilities over time, sharing them in a comprehensive chart for investors to decipher.
Charting the Course Ahead
The volatility of the trailing twelve months, computed at 39%, adds another layer of complexity to the options landscape, nudging investors to tread cautiously while exploring new opportunities. With StockOptionsChannel.com offering a treasure trove of put and call ideas, the journey into the realm of options promises both challenges and rewards.
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