Trading Insights
Huge UOA in Alibaba 3 Days Before Split News
Alibaba bulls scored an 8X gain this week on news that the Amazon rival would be splitting into 6 parts, and UOA predicted the whole move.
Sometimes, the unusual options activity speaks for itself.
Market Rebellion identified this unusual bullish call trade in Chinese Amazon rival Alibaba (BABA) on March 24th, with the stock at just $87.09. This trade, which cost roughly $800,000 to make, was set to expire just 7 days after it was opened, on March 31st.
We knew that this was fresh buying when we saw that the open interest was just 1,054 on the day of the trade. At the time, there was no obvious impetus for this trade. However, when Market Rebellion spots massive unusual options activity without any obvious cause, we start paying close attention.
Then, just four days later, the news broke.
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Alibaba Splits into 6 Pieces
The game changing news:
Chinese e-commerce company Alibaba has restructured into a holding company with six business units, a move that could signal the break-up of the country’s biggest e-commerce firm. The restructuring allows each business unit to have its own CEO and board of directors to facilitate quicker decision-making, while they will be able to seek outside capital with a view to potential IPOs.
The restructuring is seen as an attempt to ease concerns about the concentration of power among China’s tech giants. The move could also protect the company from future regulatory action. On the day of the news, Alibaba shares rose over 14%, and the stock has continued to rise throughout the week.
The stock rose 14% immediately, and continued to rise throughout the week.
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Result: Options 8X in Value
Recall that the 4,400 options shown above were purchased for an average price of $1.81. As of Thursday March 30th, those options have traded for as high as $15.06 in value — a more than 8X multiple from their original value. That brings the total value of the trade up to over $6.6 million.
That’s the magic of unusual options activity. Discover what unusual options activity we’re seeing today inside UOA Essential.
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UOA Essential
- 1 Primary Trade Idea + Bonus Trades Per Week
- 1 LIVE Weekly Webinar
- Member Forum
- Weekly Newsletter
- Pete Najarian's UOA Playbook
- VIP Friday Virtual Cocktail Hour
See Terms of Use for details.
UOA Pro
- 10+ Trade Ideas Per Week
- 3 LIVE Weekly Webinars
- LIVE Q&A Session With Lead Instructor Bill Johnson
- Q&A Sessions
- PLUS All Essential Features
Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.
UOA Essential
$
995
/year
Billed Annually at $995
- 1 Primary Trade Idea + Bonus Trades Per Week
- 1 LIVE Weekly Webinar
- Member Forum
- Weekly Newsletter
- Pete Najarian's UOA Playbook
- VIP Friday Virtual Cocktail Hour
- SAVE 58% Annually
Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.
UOA Pro
$
3,495
/year
Billed Annually at $3,495
- 10+ Trade Ideas Per Week
- 3 LIVE Weekly Webinars
- LIVE Q&A Session With Lead Instructor Bill Johnson
- Q&A Sessions
- PLUS All Essential Features
Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.
UOA Essential
- 1 Primary Trade Idea + Bonus Trades Per Week
- 1 LIVE Weekly Webinar
- Member Forum
- Weekly Newsletter
- Pete Najarian's UOA Playbook
- VIP Friday Virtual Cocktail Hour
- SAVE 58% Annually
Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.
UOA Pro
- 10+ Trade Ideas Per Week
- 3 LIVE Weekly Webinars
- LIVE Q&A Session With Lead Instructor Bill Johnson
- Q&A Sessions
- PLUS All Essential Features
Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.