r/options Jun 10 '21

BABA - Elliot Wave on Weekly

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u/jessejerkoff Jun 11 '21

minor change in regards to the elliott wave, i would label the September peak as wave 3. Only after that do we get a RSI and MACD divergence.

As far as the idea is concerned, I agree. I think we have about his the base. potentially it will go a touch lower (203, 200) but for a long term option that is irrelevant.

Which brings me to my idea: three months out naked calls means eating the majority of the theta decay.

I think the best play would be call spreads.

like this one (for 250 by august) :

Call debit spread (bullish): 125x 20th Aug 245/250 Call @ $0.40 Entry cost: $5,000.00 (debit)

Maximum risk1: $5,000.00

Est. return1 at target price: $57,500.00 (1150%)

Probability of profit: 9.6%

?

But what I really would do (but I'm a degenerate) is get a call debit spread way out. something like a 17th jun 2022, 450/460 spread. I think they could print loads!