Options Recap
Alibaba Group Holding Ltd. BABA– There was quite a to-do yesterday morning after BABA went rocketing up in the premarket on raised revenue guidance, and we jumped at the chance to signal some options ideas to correspond with the activity.
In our premarket report we highlighted the BABA Weekly $140-145 Calls with the explicit warning that “Whenever a stock has gapped up this hard, we must be on the lookout for an early pullback into a dip-and-rip pattern” and we really couldn’t have been more spot-on with how we approached this play if we had a working crystal ball.
We don’t have that, but we do have loads of experience identifying winning options plays, and not only did the stock behave exactly as we said it would, selling off before exploding to new highs, but every single contract we highlighted went bananas as a result. Regardless of which of our four highlighted contracts was chosen as the strike price, gains ranging from the 1100% to the 3100% range. Not bad for a day’s work!
$140 Calls – Range: .34-4.40 – Max Gain: 1167%
$141 Calls – Range: .25-3.65 – Max Gain: 1360%
$142 Calls – Range: .16-2.87 – Max Gain: 1694%
$143 Calls – Range: .12-2.41 – Max Gain: 1908%
$145 Calls – Range: .05-1.63 – Max Gain: 3160%
We’re going to look for similar chart activity today to lead to further gains in these plays, but as we always do when discussing weekly options on a Friday, we feel obligated to warn our readers that trading such contracts is for EXPERT traders only!
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Yahoo! YHOO – We were also looking at some YHOO contracts yesterday, although they didn’t have much open interest with the exception of the Weekly $55 Calls. Those ran from .10 to 1.01 for a 910% rip on the day.
Ability, Inc. ABIL
On Wednesday morning we flagged ABIL as a possible bottom-play and the subsequent activity over the ensuing two sessions has been excellent.
The first day it ran from .6298-.91, for a solid 44% rise, and yesterday, it one-upped its performancde with an intraday run from .80 to a new high of 1.69. It was good for a daily pop of 111% and a total two-session upswing over our observed low amounting to 168%
Delcath Systems, Inc. DCTH
We also want to mention DCTH this morning, a stock that had been in a continual downtrend for months on end. It just began to show life yesterday and is gapping up in premarket trading this morning, so we’ll just want to keep an eye peeled.
As we said, this stock has been ridiculously oversold for a long while, so the resulting snapback could turn out to be pretty impressive. .
Extended Watchlist:
ADHD, CAMT, GMO, OPTT, RADA