Strategy For the next earning on May 18..! (Skin in the game)

28 באפר׳ 2023

Before any action, we should answer this question:

Is BABA going to experience higher-than-expected volatility in the next 3 weeks?

If your answer is No, do not waste your time reading the rest of this article!

If your answer is Yes,

Then we should talk about the direction:(Current price for BABA Put/Call option is 3.1-3.4 USD for May 19, 2023
If you think it moves toward 105: Buy 2x Call and 1X put, strike price 85, expiration May 19.
If you think it moves toward 79: Buy 2x Put and 1X Call, strike price 85, expiration May 19.
Position size: 3% of your capital (2%+1% based on the direction you think it will move)

What could happen:
1- BABA does not move: you will lose 3%
2- BABA moves big against your prediction, you will not lose any money!
3- BABA moves toward your target, you will double up!

Statistics:

BABA's average weekly move is 11.63% (Min:4.8%, and Max: 26% in the past trading year)

BABA's average daily move was 4% (Min:1.5%, and Max: 13% in the past trading year)

Skin in the game: I have bought 20 Call options and 10 put options Strike 85, May 19, 2023

if the price remains between 75-90, I will lose money, otherwise, I will win!

17 במאי 2023

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