To The Moon

Alibaba's earnings on Thursday，the results from analysts' expectations, Alibaba$Alibaba(BABA)$  is still very pessimistic:

Analysts lowered alibaba's earnings expectations, according to bloomberg consensus, alibaba in the third quarter of fiscal 2022 revenue for 2453.7, year-on-year growth of 11%; Adjusted net income of 44.185 billion yuan, down 27.1% year on year. Adjusted EPS to 16.198 yuan,down 26.4% year on year.

And Q2 quarterly revenue growth of 29%, compared to the combined effects year-on-year growth is 16%.

It's to say that consumer sentiment has been pretty weak this quarter, and we're just a few drops away from single-digit growth.

So will earnings fall this time?

Not necessarily. At present, the call volume is very active in the options outmove list, while from the perspective of large orders, there are straddle, forward call and spread call, all of which are biased to positive fluctuations.

But that's still 14% short, and it's going up, so call is probably hedging.

My personal opinion is that there is a 70% probability that the fluctuation of alibaba's financial report will be less than 5%. Because the media and analysts have widely publicized the forecast of this financial report, the spread strategy in the large order is really appropriate, that is, to sell 120call and buy 125call:

• $BABA 20220225 125.0 CALL$
• $BABA 20220225 120.0 CALL$

Based on the stock price of 112, an 8% increase in earnings results would result in a loss, while an 8% increase or a decrease would result in a gain of $100.

Of course, a better deal opportunity in Alibaba after the release of earnings.