Alibaba Sees Heavy Call Buying Amid Speculation of Short Squeeze and Improved U.S.-China Relations
China-centric ETFs and Ford Motor Also Benefit from Optimism
Quick Look
Alibaba (BABA) options see 5:1 call-to-put ratio with 88% of $160M premium in calls, speculating a short squeeze and benefiting from potential improved U.S.-China relations, also boosting China-centric ETFs like KWEB and unexpectedly Ford Motor (F) on battery tech hopes.
AI-generated summary
About five times more calls traded than puts in Alibaba, with over 75,000 calls bought vs. under 12,000 puts, per ThinkOrSwim. Of $160M in options premium by midday Wednesday, 88% was in calls, via SpotGamma. The KraneShares China Internet ETF (KWEB) was a top-10 traded security by options volume, with >750,000 contracts traded and almost all premium ($48M of $50M) in calls. Nine of the top 10 trades by dollar amount were call purchases, with the most popular contract being the 32-strike call expiring Friday.
Neil McDonald, CEO of Moomoo, noted, "There's been a noticeable increase in discussion around the potential for a short squeeze in KWEB and renewed momentum in BABA, referred to as the 'Trump effect' reflecting expectations that improving U.S.-China dialogue could catalyze Chinese tech names that have lagged for months."
Ford Motor surprisingly benefited, with shares soaring 13% after a Morgan Stanley analyst highlighted the carmaker's energy-storage licensing agreement with China’s Contemporary Amperex Technology (CATL) as a potential positive catalyst.
