someone sold BABA PUT worth $10.85million. Looks like someone was very bullish on BABA
On April 13, 2023 at 15:54:57 ET an unusually large $10,851.50K block of Put contracts in $Alibaba(BABA.US$ was sold, with a strike price of $195.00 / share, expiring in 64 day(s) (on June 16, 2023).
Fintel tracks all large options trades, and the premium spent on this trade was 1.85 sigmas above the mean, placing it in the 97.47th percentile of all recent large trades made in BABA options.
From the unusual activities in the option chain the $10.85m short PUT can be seen but there are also a lot of bearish move that is worth >$10m.
source: (note: need to copy the full url including the $10851.50k) https://www.nasdaq.com/articles/unusual-put-option-trade-in-alibaba-group-holding-limited-adr-baba-worth-$10851.50k
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QRST : i let my put contract assigned to me...
hope it will do me good
MonkeyGee : that is very bullish. maybe someone knows someone who knows something
Lucky 猫 : Hey would like some tips from the options master haha. I got deep OTM 125C Baba ~0.11 cost with 5 DTE. Should i hedge by shorting the underlying at ~96-99 spot price, or should i consider rolling it/waiting till friday? I cant seem to figure which is the best strategy
ZnWC : I think the article has been taken down, link is pointing towards other news. Sound like a gimmick to me to promote Alibaba stock.
doctorpot1OP ZnWC: the article is still there. moo moo didn't take the $10851.50k as part of the url. so need to select the full url and open it to see. https://www.nasdaq.com/articles/unusual-put-option-trade-in-alibaba-group-holding-limited-adr-baba-worth-$10851.50k
doctorpot1OP QRST: Hahaha but this one we don't know if the option seller actually did something else on top of it or not though. e.g. short the stock then sell deep ITM PUT to hedge.
so best to use your own judgement
doctorpot1OP MonkeyGee: maybe hahaha
but we might also be just seeing 1 side of the story, the seller of the option might have had done something else as well that we do not know
doctorpot1OP Lucky 猫: From the info, it seems like you had bought BABA 125C thus you want to delta hedge by shorting delta amount of stock. I.e. if delta of 125C is 0.3 then you short 30 stocks. do note that delta hedging requires you to actively buy and sell to adjust your hedge because option's delta will keep moving when price move. and it requires quite substantial margin also, because as BABA price goes up, the call option's delta goes up and you have to short more and more BABA which eats up margin. it isn't a beginner friendly strategy. I won't do that as if done wrongly you can lose a lot more than the option premium you paid for the 125C.
lucky the premium only $11 per contract.
A simpler hedge is just to turn it into a spread, like sell a 130C so you get back some money. but sadly as the option is deep OTM the fees might make it infeasible. the price now is $0.01 so this way of hedging isn't feasible. selling 1 130C give you $1 but fee is more than $3.
I just checked the 125C price and it seems like now it is $0.01 so rolling it may not make sense due to fees. if you only have 1 option contract. selling it gets you $1 but fee is more than $3, so might as well hold. so if you want to roll (sell current buy new position), then just open another position can already cause selling current may lose you more money due to fees.
So assuming you bought less than 3 125C, currently seems like there isn't a feasible solution other than praying
ZnWC : Thanks for the clarification but this is what I see which clicking the link - can't find the article you posted.
I tried to sell Alibaba 1 lot options at that strike price and expiry date and no one wants to offer as the volume is so low.
But I'm usually skeptical about such large volume options trade - too good to be true need to be cautious. I can't imagine anyone will be so foolish to buy his options which expired in 64 days
Anyway that's is my opinion.
Lucky 猫 doctorpot1OP: Ah i see, that leaves me with either going short or holding till expiry and praying that it goes up enough to breakeven. Unfortunately it isnt just 1-3 calls, i bought some a few weeks back and averaged down as spot price dropped
. Would just hold it in that case and recover losses elsewhere while i dream of BABA mooning by Friday 
Thank you!
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