The current beta-weighted delta of my portfolio is currently minus 4. Want to balance it a bit. Thinking of a positive net delta trade. Came across BABA, thought it could be a good candidate to serve this purpose. Well a week or so, i did lose some money in an iron condor position involving BABA.
Rationale for a bull credit call spread:
- Jack Ma is found;
- ANT IPO in the pipeline (already sorted with regulators?);
- Latest earnings way exceeded analysts estimates. https://www.cnbc.com/2021/02/02/alibaba-baba-earnings-q3-2021.html
Technically speaking, it looks like an uptrend to me.
I am considering a possible iron condor strategy with a positive net delta of 1.19 and P50 of 82%. Although BABA’s IV rank is below 30 (dropped – due to post recent earnings announcement), its IV is above 40% (of which I would still consider it to be OK to sell options). Hoping to fetch a credit preimum of at 1/3 of the width of the iron condor ~ >$1.33.
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