BABA Earnings Beats Estimates for November 2, MC has detected two notable historical trends for after earnings.

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Alibaba Group Holding Limited American Depositary Shares Each Representing One Ordinary Share (BABA)just reported earnings on November 2, 2018, before the market opened. Earnings Per Share (EPS) was reported at $1.40, after analysts had expected $1.07 per share. As a result, BABA opened up +0.9%, but dropped later in the day and closed down -2.4% at 147.59. Since earnings was reported, the stock has traded in a range from 144.23 to 154.36.

Price Volatility Against Expectations

Ahead of earnings, option traders were expecting a ± 5.4% move for this date, so the earnings move of -2.4%represents an undersized move against the market. BABA has only experienced 2 larger-than-expected earnings moves in the last 12 quarters.

Earnings Price Patterns

The MarketChameleon earnings price pattern has detected two notable historical trends for after earnings.
3 Days After Earnings:For 10 of the last 12 quarters (83%), BABA stock price has gone up in the 3 days following earnings. It has had an average gain of +2.0% during that span.
2 Days After Earnings:For 10 of the last 12 quarters (83%), the stock price has gone up in the 2 days following earnings. Over that period, it has an average gain of +1.8%.

Earnings Option Strategies

MarketChameleon's option strategy analysis shows that selling out-of-the-money calls one day after earnings and buying them back one week after earnings had 92% winning occurrences, for an average gain of +62.6%. Additionally, selling at-the-money straddles resulted in 83% winning occurrences, for an average return of +27.5%.





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