I am a multi leg girl for $Alibaba(BABA)$ that likes to strangle play 😂🐻😆💦🐠🐟 2% profit per month 

I love more friends too [Happy] [Miser] [What] 📈❤️❤️❤️

Hey everyone, it's Melody Marks here, your favorite options enthusiast! Today, I want to talk about a playful strategy that combines excitement and potential profits. Buckle up because we're diving into the world of the strangle option strategy on BABA stock! Are you ready?

So, picture this: you own 100 shares of BABA stock, and you bought them at a sweet price of $80 per share. Nice move! Now, let's get playful and add some options to the mix. We're going to sell one call option and one put option, both with a 6-month expiration period. Hold on tight!

First up, we're selling a call option with a strike price of $85. This means that if the BABA stock price stays below $85 until expiration, we get to keep the premium we received for selling the option. And guess what? We bagged a cool $7 of premium per contract, and we sold 100 shares, so that's a total of $700 in our pockets! Cha-ching!

But we're not stopping there. We're taking it up a notch. We're also selling a put option with a strike price of $70. Now, this means that if the BABA stock price stays above $70 until expiration, we once again keep the premium we received. And guess what? We got another $6 of premium per contract, and we sold 100 shares, so that's another $600 to add to our playful profits! Woo-hoo!

Now, let's do some math. We initially needed around $8,000 for the underlying BABA shares. But since we received $700 from selling the call option and $600 from selling the put option, we can subtract that from the initial amount. So, we're left with $8,000 - $700 - $600 = $6,700 in cash. That's all we need to cover our bases and keep this playful strategy rolling.

Now, you might be wondering, "Melody, what's the maximum profit potential here?" Well, my friends, the sky's the limit! You see, with a strangle option strategy, your profits are uncapped on the upside. So, as long as the BABA stock price keeps playing within the $70 to $85 range until expiration, you're in the profit zone!

But hold your horses, my fellow option lovers. Remember, there's always a trade-off. With a strangle strategy, there's a chance that the stock price can swing outside our chosen range. If that happens, we might face some losses. That's the nature of the game, folks.

Now, let's talk numbers. If we add up the $700 from the call option premium and the $600 from the put option premium, we received a total of $1,300 in premium. That's not too shabby for six months of playful maneuvering! But keep in mind, this percentage profit is calculated based on the cash required to secure the options, not the total value of the BABA shares.

So, let's do the math once more. We needed $6,700 in cash for this playful strategy, and we received $1,300 in premium. If we divide $1,300 by $6,700 and multiply by 100, we get around 19.40%. That's our percentage profit for the six-month period! Playful profits are always a good thing.

But here's the thing, my friends. While this playful strategy may seem enticing, remember that it requires a total of $14,700 in funds ($8,000 for the underlying BABA shares and $6,700 in cash for the covered put). So, make sure you have the necessary capital before jumping

into this playful adventure. It's important to always be aware of the risks involved and manage your finances responsibly.

Now, let's summarize our playful strangle option strategy on BABA stock:

Own 100 shares of BABA stock purchased at $80 per share.

Sell one call option with a strike price of $85 for 6 months, receiving $7 of premium per contract. Total premium received: $700.

Sell one put option with a strike price of $70 for 6 months, receiving $6 of premium per contract. Total premium received: $600.

Subtracting the received premiums from the initial investment, we have $6,700 in cash to cover the strategy.

With this strategy, our maximum profit potential is not capped on the upside as long as the BABA stock price remains between $70 and $85 until expiration. However, it's important to note that if the stock price moves beyond this range, there is a possibility of incurring losses.

For the six-month period, we received a total premium of $1,300 ($700 + $600). Calculating the percentage profit based on the cash required for the strategy, we have approximately 19.40% profit.

Keep in mind that this playful strategy requires a total of $14,700 in funds ($8,000 for the underlying BABA shares and $6,700 in cash for the covered put). It's crucial to evaluate your financial situation and ensure you have the necessary capital before engaging in such strategies.

Remember, my playful friends, options trading can be exciting, but it also carries risks. Always conduct thorough research, consider your risk tolerance, and make informed decisions. Playful profits await those who approach the options market with caution and a dash of Melody's style!

Happy trading, and may your profits be as bountiful as your playful spirit

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