Alibaba Group Holding Ltd (NYSE:BABA) is edging closer to listing its chip unit, T-head, leaning into strong investor demand for companies aiming to challenge Nvidia (NVDA) in the AI accelerator space. The first move would restructure its the unit with partial employee ownership, ahead of an initial public offering.
At last look, BABA was up 4% to trade at $176.66. The stock recently cleared the $155 region, a level that capped gains for roughly a month, after breaking above pressure at the 100-day moving average. Shares are now up 96% year over year.
Options volume is now running at triple the intraday average volume, with 120,000 calls and 22,000 puts traded so far. The most active contract by far is the weekly 1/23 180-strike call, expiring tomorrow.
Now is a good time to load up on options, as BABA's Schaeffer's Volatility Index (SVI) of 43% stands higher than just 18% of all other readings from the past year.
What's more, the China-based e-commerce giant's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 81, indicating Alibaba's stock has tended to exceed option traders' volatility expectations during the past year.
