BABA announces earnings on Thursday before market open, so look to put on any play in the final hours of the NY session on Tuesday.
Here is one possible play that may naturally require strike adjustment in light of any movement the underlying experiences during the trading day:
BABA Feb 5th 61.5/78 Short Strangle
Probability of Profit %: 70%
Max Profit: $115/contract
Buying Power Effect: Undefined Risk
Break Evens: 60.35/79.15
Notes: I looked at an iron condor setup in off hours, but it may not provide enough juice to be worthwhile. Right now the Feb 5th 56/61.5/78/83.5, a $470 buying power setup, looks like it could get you a .80 credit ($80/contract max profit), but the long call at the 83.5 strike is nearing "no bid" (bid .01/ask .10). Of course, it certainly wouldn't hurt to try during market hours to see if you could get a fill if a defined risk setup is more to your liking.
Look to take off the entire setup at 50% max profit and redeploy the buying power elsewhere; one side or the other when it reaches near worthless (<.05/$5); and be prepared to roll on the break of a side prior to expiration out for duration, selling an oppositional side against for a credit that exceeds the cost to roll the tested side if you have to pay a debit to roll.
Here is one possible play that may naturally require strike adjustment in light of any movement the underlying experiences during the trading day:
BABA Feb 5th 61.5/78 Short Strangle
Probability of Profit %: 70%
Max Profit: $115/contract
Buying Power Effect: Undefined Risk
Break Evens: 60.35/79.15
Notes: I looked at an iron condor setup in off hours, but it may not provide enough juice to be worthwhile. Right now the Feb 5th 56/61.5/78/83.5, a $470 buying power setup, looks like it could get you a .80 credit ($80/contract max profit), but the long call at the 83.5 strike is nearing "no bid" (bid .01/ask .10). Of course, it certainly wouldn't hurt to try during market hours to see if you could get a fill if a defined risk setup is more to your liking.
Look to take off the entire setup at 50% max profit and redeploy the buying power elsewhere; one side or the other when it reaches near worthless (<.05/$5); and be prepared to roll on the break of a side prior to expiration out for duration, selling an oppositional side against for a credit that exceeds the cost to roll the tested side if you have to pay a debit to roll.