Alibaba has been falling for a week, who's still dumping $3.98M betting on 2027?

Last Friday, $Alibaba(BABA.US) performed very poorly. In pre-market trading, it fell by 3.42% at one point due to news of ARK's reduction, gapped down to $92, and touched $91.99 during the session. The Hang Seng Index also fell by 1.755% that day. Looking at the daily chart more broadly gives a clearer picture: the stock price slid from $107.44 on 6/17 all the way down to close at $94.81 on 6/26, a drop of nearly 12% over seven trading days. On such a day when everyone was bearish and ARK was dumping shares, two notably bullish option orders appeared in the market, which I think is worth examining in detail.

The first order was the big one: someone bought $105 Calls expiring in January 2027, 4,000 contracts, spending $3.98M. This was the largest bullish order in the entire market that day. The expiration is 203 days away, with a strike price of $105, about 10% above the current price. Such a long duration and large size don't look like short-term speculation; it's more like using options as a substitute for the underlying stock—locking in exposure to a bullish view on Alibaba a year from now with a $9.95/share premium, with the worst-case scenario being the total loss of that premium.

The second order was smaller but more interesting: someone sold $93 Puts expiring in early July, 800 contracts, for $186k. Note the $93 level—essentially right at the day's low of $91.99. After collecting the premium, if shares are actually received at this price, the cost can be further reduced to just over $90. Being willing to set a buy order at this price on a stock that just fell 12% and touched $92 that day expresses a view that "I think it's near the bottom around here."

Putting the two orders together, the direction is the same but the thinking is on two levels: the long-term one bets on Alibaba's recovery over a one-year horizon, while the near-month one bets on short-term support around $92-93. This kind of divergence, "adding positions against the panic," is one of the signals I pay most attention to when watching order flow—it doesn't guarantee being right, but at least it shows someone is putting real money on the opposite side of the selling pressure.

However, the biggest enemies of LEAPS are time and narrative: as long as policy headwinds for Chinese stocks and sustained selling pressure from big funds like ARK don't ease within those 203 days, the $105 strike price will remain a looming threat. For the near-month Put selling leg, if the $92 "floor" is broken by macro factors, taking delivery would mean catching a falling knife halfway down. So this is not a conclusion that says "get in now"—the large contrarian orders are worth tracking for how they play out later, but whether Alibaba's downtrend has truly stopped will depend on whether it can hold above $95 at tonight's open.