Alibaba Group Holding Ltd (NYSE:BABA) is up 8.7% to trade at $177.21 at last check, after the China-based e-commerce giant announced it would hike AI spending on models as well as infrastructure beyond $50 billion. The tech giant also unveiled Qwen3-Max, its largest-ever AI language model, and announced plans to open new data centers.
BABA surged to a three-year high of $178.11 right out of the gate, pushing past a recent ceiling at $170. The security now sports a 109.9% year-to-date lead and is on track for its best single-day percentage gain since Aug. 29.
Options volume is now running at triple the intraday average volume, with 332,000 calls and 95,000 puts traded. The most active contract by far is the weekly 9/26 180-strike call.
Short-term options traders were much more bearish than usual coming into today. BABA's Schaeffer's put/call open interest ratio (SOIR) ranks in the 86th percentile of readings from the past 12 months. A continued unwinding of this pessimism could create tailwinds for the security.
Now looks like a great time to weigh in with options. This is per the equity's Schaeffer's Volatility Index (SVI) of 43% that sits in the 20th percentile of annual readings, indicating options traders are pricing in low volatility expectations. Plus, Alibaba stock's Schaeffer's Volatility Scorecard (SVS) of 96 out of 100 suggests it tended to outperform volatility expectations over the past year.
