Options Insight: How to Play Alibaba

The video discusses the market's reaction on Inauguration Day, highlighting low implied volatility and a lack of heavy selling. It explores future market indicators, such as changes in implied volatility and the Mexican peso's response to Trump's rhetoric. The analysis shifts to Alibaba, examining its stock performance in relation to the Chinese renminbi and potential political risks. The video concludes with an investment strategy involving Alibaba, considering strong fundamentals and potential political impacts.

What was the market's reaction on Inauguration Day according to the transcript?

• Heavy selling with high volume

• A benign environment with low implied volatility

• A significant increase in implied volatility

• A steep decline in stock prices

Which factor is NOT mentioned as a potential sign of market nervousness?

• Increase in put implied volatility

• Decrease in call implied volatility

• Rise in the VIX index

• Increase in stock buybacks

How does Alibaba's stock price correlate with the Chinese renminbi according to the transcript?

• Negatively correlated

• Positively correlated

• No correlation

• Correlated only during earnings reports

What is the expected impact of political risk on Alibaba's stock?

• Neutral impact as it is not affected by politics

• Positive impact due to increased demand

• Negative impact due to currency manipulation concerns

• No impact due to strong fundamentals

What trading strategy is suggested for Alibaba in the transcript?

• Investing in Alibaba's competitors

• Short selling Alibaba stocks

• Selling all Alibaba stocks

• Buying a 101 ten call spread