Alibaba warrants saw significant outflow of funds. Avoid buying too close to the strike price when re-entering the market.

Investors are concerned about the overheating speculation in the mainland stock market, triggering sell-offs. Previously soaring sectors like chips and pharmaceuticals have seen significant pullbacks, $Cambricon(688256.SH) plummeted, $SMIC(00981.HK) followed suit, and $BABA-W(09988.HK) , which had just dreamed of chips, also fell to post-earnings lows. The massive northbound inflows from the previous day are now facing immediate losses.

With the supply of near-price bull and bear certificates in the market, the outflow of bullish funds from Alibaba the previous day shows that the warrant investors of Alibaba are indeed agile. Volatility creates short-term trading opportunities. Alibaba's pullback coincides with the full supply of market products. The nearest bull certificates in the market can be priced at 128 yuan, which is quite risky. With intraday volatility expanding, it’s better to be conservative when choosing bull and bear certificates, or even use CALLs. There are about 7x CALLs in the market like $UBKUASO@EC2701B(14821.HK) , which are long and out-of-the-money, suitable for position preparation, with a daily time decay of 1.4%. For bull certificates, refer to options below the moving average, such as below the 20-day line, $ UB#ALIBARC26074.HK with a leverage of nearly 12x and a knock-out price of 121.4 yuan.