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BABA Call Spread Buyers Gain 11.3% in a Single Day—Here’s the Data Behind the Move
A high-volume call spread in Alibaba (BABA) traded early in the day for an average price of $1.59 per spread. Just two hours later, as the stock climbed by $0.87 to $166.83, the value of the spread jumped to $1.78—netting buyers an average gain of $0.18, or 11.3%. This rapid gain raises an important question: Are option traders positioning for an even bigger move as expiration approaches?
Major Trade Details: $168K Bet Could Turn Into $621K Profit
| Trade Feature | Details |
|---|---|
| Expiration Date | 26-Sep-25 |
| Strike Prices (Call Spread) | 172.5 / 180 |
| Number of Contracts | 2,102 |
| Days to Expiration | 9 |
| VWAP Trade Price | 1.59 |
| VWAP Bid/Ask | 1.52 / 1.69 |
| Stock Price at Trade | 165.96 |
| Cost of Trade | $168,000+ |
| Potential Maximum Payout | $621,000 |
The call spread expires in just nine days and will achieve its maximum profit if BABA shares finish above $180 at expiration. Buyers stand to more than triple their money, if their bullish view plays out. For more details or to analyze similar trades, check out the BABA multi-leg trade analyzer.
Technical Indicators: BABA Shows a Clear Uptrend
BABA has been on a tear lately, easily outpacing both its historical averages and the broader market. Let’s break down the key metrics:
- Stock Price: $166.83 (+2.85% today, +0.5% from open)
- Trading Above Moving Averages:
- +23.1% above 20-day moving average ($135.52)
- +33.6% above 50-day moving average ($124.90)
- +49.3% above 250-day moving average ($111.74)
- Breaking Key Resistance: Pushed above the expected daily resistance of $166.32
- Outperformed SPY ETF: Up +99.8% over the last year vs. SPY’s +18.3%
- 52-Week Range: Low = $80.53, High = $162.21 (Currently breaking new highs)
BABA Returns Versus SPY (Key Timeframes)
| Duration | BABA Return | Low | High | SPY Return |
|---|---|---|---|---|
| Today | +2.8% | 163.26 | 167.32 | -0.2% |
| 2 Week | +20.4% | 130.06 | 167.32 | +2.9% |
| 1 Month | +37.6% | 117.51 | 167.32 | +2.4% |
| 3 Month | +43.9% | 103.71 | 167.32 | +9.6% |
| 6 Month | +18.4% | 95.73 | 167.32 | +17.6% |
| 1 Year | +99.8% | 80.06 | 167.32 | +18.3% |
| YTD | +97.0% | 80.06 | 167.32 | +13.0% |
| 3 Year | +93.7% | 58.01 | 167.32 | +75.7% |
| 5 Year | -39.8% | 58.01 | 319.32 | +103.9% |
Skew Indicators Show Bullish Options Sentiment
It’s not just technical momentum that stands out—options market data points toward optimism as well. BABA’s proprietary 30-day implied volatility skew ranks in the 76th percentile, one of the most bullish readings over the last year. In short, option buyers are willing to pay up for calls, signaling the market’s confidence in higher prices ahead.
The combination of bullish technicals and options skew could be one reason for today’s aggressive call spread purchase. If the stock’s current trend holds, the bet has a solid probability of paying off, though, of course, it’s not risk-free—BABA needs to gain another $13.17 to close above $180 for the max payout by expiration.
Key Takeaway: High-Conviction Call Spread Bet Follows Bullish Signals
This large call spread trade is more than just a one-off; it comes amid a technical breakout, impressive outperformance versus the S&P 500, and a notably bullish skew indicator. While no single trade or indicator is ever a guarantee, these factors together make BABA a name to watch into the end of the month. For investors or traders curious about similar opportunities, you can explore more call spreads and multi-leg strategies using the multi-leg trade screener on Market Chameleon.
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NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
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