Alibaba closed at $109.26, down 1.39%.

Despite the daily decline, large options trades revealed a decisive bullish tilt. A $1.21 million long-dated call purchase targeting the $130 strike stood out, while a second $312,000 call buy added to the upside conviction. The overall flow favored out-of-the-money call buying, with institutional traders positioning for a substantial appreciation in Alibaba over medium- to long-dated expirations rather than hedging against further downside.

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Options Indicators

Alibaba’s implied volatility is 43.47%, and with an IV percentile of 33.07%, current option pricing sits in a broadly neutral zone rather than at an extreme. Volatility expectations are not especially cheap, but they are also not in an elevated or heavily overpriced range, suggesting Alibaba’s options are carrying moderate premium levels. The IV/HV ratio of 1.28 further indicates implied volatility is running above realized volatility, so the market is assigning somewhat richer forward-looking volatility expectations than what the stock has recently delivered. The Call/Put volume ratio is 3.03.

Large Trades

A call purchase worth $1.21 million was the largest displayed trade, with buyers taking 2,000 contracts of the March 19, 2027 $130.00 call. With BABA referenced at $108.3172, this strike is out of the money, so the trade reflects a clearly bullish directional bet on a substantial upside move over a long-dated horizon. The use of long calls at this higher strike suggests the trader is seeking leveraged upside exposure while limiting risk to the premium paid, which is consistent with a conviction-driven bullish outlook rather than a defensive hedge.

A call buy worth $312,000 was the second displayed trade, consisting of 1,500 contracts of the October 16, 2026 $110.00 call. This strike is also out of the money versus the current stock reference, though only slightly, making it a bullish position that targets a more moderate upside move over the next year. Compared with the larger 2027 call purchase, this trade points to nearer-dated upside participation and reinforces the view that at least one large player is positioning for continued appreciation in BABA rather than downside protection.

Overall, the large-trade flow leans bullish. The dominant displayed activity was concentrated in outright call buying at out-of-the-money strikes and medium- to long-dated expirations, which typically signals expectations for higher prices and willingness to pay premium for upside exposure. While there was also premium-collecting call-selling activity elsewhere in the bulk orders, the stronger emphasis on outright upside call purchases leaves the broader read as moderately bullish, with institutional sentiment favoring appreciation in BABA rather than a defensive or bearish stance.

Strategy Reference

For a low assignment probability, premium sellers could consider the $90.00 put in the nearest monthly expiration, as it sits well below spot and outside the expected IV range; alternatively, a bull call spread such as buying the $115 call and selling the $130 call in October 2026 reduces upfront margin while still capturing upside toward the large-trade target zone.