Alibaba closed at US$109.30, rising 0.68%.

Despite the modest daily gain, the options market flashed a distinctly defensive tone. The session’s most notable trade was a substantial in-the-money put spread, absorbing a net debit of $7.55 million. This oversized, directional downside play dwarfed the only other sizeable activity — a minor $38,700 bull call spread — signaling that institutional sentiment is leaning heavily bearish even as the stock inches higher.

>>>Start OPTIONS trading & earn up to SGD 200 in rewards!

Options Indicators

BABA’s implied volatility is 42.51%, and with an IV percentile of 23.11%, current option pricing sits on the lower end of its recent historical range, indicating volatility is relatively subdued and options are cheaply priced rather than expensive. At the same time, the IV/HV ratio of 1.02 suggests implied volatility is broadly in line with realized volatility, so the options market is not showing a major premium or discount versus actual recent stock movement. The Call/Put volume ratio is 1.58.

Large Trades

A net debit put spread worth $7.55 million was the standout large trade, built through the purchase of the September 18, 2026 $150.00 put and the September 18, 2026 $140.00 put. With both legs consisting of bought puts, this is a same-direction long put spread structure, and the preprocessed net debit of $7.55 million defines the trade’s size. Both strikes sit above the $109.49 reference stock price, so both options were in the money at execution, which points to an aggressive bearish positioning with meaningful premium committed. Strategically, this structure expresses a directional downside view while also positioning for a large move lower, using a debit spread format to gain bearish exposure with a defined payout range rather than selling premium.

A bull call spread with a net debit of $38,700.00 was the other displayed large trade, created by buying the October 16, 2026 $140.00 call and selling the October 16, 2026 $165.00 call. Because it includes both a buy call and a sell call, it is a call spread strategy, and the provided net debit should be used as the transaction’s size. Both strikes were out of the money versus the $109.49 stock reference, making this a lower-cost bullish expression that caps upside in exchange for reducing premium outlay. The strategic intent is a directional upside bet rather than premium collection, showing that some traders are willing to position for a rebound, but only in a controlled-risk format. Overall, the large-trade flow leans clearly bearish: the dominant capital commitment was concentrated in a sizable in-the-money put buying structure, while the bullish activity was comparatively small and expressed through limited-risk upside exposure, indicating cautious sentiment with downside concerns outweighing optimism.

Strategy Reference

Given subdued IV levels, a cash-secured put seller looking for low assignment probability could consider the approximately 15-delta strike in near-term expiries, which currently sits around the $95.00 put level, while a defined-risk alternative for modest bullish exposure would be a bull put spread such as selling the $95.00 put and buying the $80.00 put to cap margin requirements.