Exploring the September 2025 Options
Alibaba Group Holding Ltd (Symbol: BABA) shareholders witnessed the commencement of trading for new options today, set to expire in September 2025. Crucial to an option buyer’s pricing decision is the time value, with a substantial 501 days remaining until expiration. This new opportunity allows puts or calls sellers a chance at fetching a premium higher than nearer-expiry contracts.
Opportunities in the Option Chain
The put contract at the $80.00 strike price boasts a current bid of $9.00. By selling-to-open this put contract, an investor commits to buying the stock at $80.00 but also receives the premium, reducing the cost basis of the shares to $71.00 (before broker commissions). This might be an appealing alternative for investors eyeing BABA shares, considering a current price of $80.76 per share.
The Journey of the Strike Prices
At approximately 1% below the current stock price, the $80.00 strike sits out-of-the-money, presenting the possibility of the put contract expiring worthless. The current analytical data indicates a 65% chance of this outcome. Stock Options Channel plans to monitor these odds over time and provide updates on our website. If the contract ends up being worthless, the premium could generate a return of 11.25% on the cash commitment or 8.20% annually — known as the YieldBoost.
On the calls side, the call contract at the $90.00 strike price holds a $13.00 bid. Investors purchasing BABA shares at $80.76 and subsequently selling-to-open this call contract as a “covered call” commit to selling the stock at $90.00. This strategy could yield a total return of 27.54% if the stock is called away upon the September 2025 expiration (before broker commissions). Considering the potential for a significant upward surge in BABA shares, historical trading data and business fundamentals analysis hold critical importance.
Uncharted Waters
The $90.00 strike sits approximately 11% above the current stock price. The covered call contract could expire worthless, giving the investor both their shares and collected premium. Currently, a 44% chance is estimated for this outcome. Stock Options Channel will track and update these odds and chart the option contract’s trading history on our website. An expired contract would provide a 16.10% additional return boost or 11.73% annualized, known to us as the YieldBoost.
The implied volatility stands at 39% for the put contract and 42% for the call contract. Actual twelve-month trailing volatility is calculated to be 36%. Those seeking further put and call options contract insights are encouraged to visit StockOptionsChannel.com.
Disclaimer: Stock Options Channel is an informational website and does not offer investment advice. Please consult with a professional financial advisor regarding your investment decisions.
