The reasons behind Alibaba's surge in performance following its earnings report, commonly used options hedging strategies.

$BABA-W(09988.HK)$ Results beat market expectations, driving share prices up today and are on the rise $Hang Seng Index(800000.HK)$ und $Hang Seng TECH Index(800700.HK)$ The chief minister of the ministry. AS SEEN FROM THE BULLDOG APP, THE COMPANY'S REVENUE IS ACTUALLY NOT MUCH DIFFERENT FROM MARKET EXPECTATIONS, AND THE BIGGEST CONCERN IS PROFITABILITY. THE COMPANY'S DILUTED EARNINGS PER SHARE FOR THE SECOND QUARTER OF 2025 WERE RMB2.25, AN INCREASE OF 81% YEAR-ON-YEAR, WELL ABOVE THE MARKET EXPECTATION OF $1,508 (RMB; ET SEQ.).

There are several areas worth paying attention to, without looking at the details of the results. Performance is moderate and one-off factors, for example, this quarter's revenue of $247.6 billion increased by 2% year-on-year, while excluding higher retail sales and banking revenues, the combined income ratio will increase by 10%. Beyond that, net operating profit increased, but operating profit declined 3% to $35 billion. Non-GAAP net profit amounted to RMB33.51 billion, down 18% compared to 40.691 billion for the same period in 2024.

So in addition to looking at the overall numbers, more important is the overall performance of each key item

Alibaba China E-Commerce Group

The drop in Operating Profit was mainly driven by flash purchases in User Experience, User Acquisition, and Technology. Not to mention Alibaba's China E-Commerce Group's double-digit revenue growth and the increase in operating efficiency in many businesses, only the sale of other new businesses.

The company launched a flash shopping service on the Zaboo app in April, making a big jump in real time retail sales, and led by 25% year-on-month growth in consumer spending in the three weeks prior to 8 months. This reinforces the leading position of the app in China's e-commerce industry. The market is pleased with the performance of flash purchases, but the profitability of the business has briefly decreased, and the startup companies have increased the flow, so that the long-term development is better.

E-Commerce business revenue stood at RMB118.6 billion, up 9% year-on-year. Customer management revenue grew by 10%, driven primarily by Take-rate. The increase in Take rate reflects the preferences of users on the corporate e-commerce platform, and user responsiveness is the most important factor in the future of platform spending.

To put it simply, in terms of performance, Alibaba China's e-commerce group's performance in a market that has been unpromising for more than a year, is the timing of the stock market, and more importantly, it can inspire investor confidence.

Ali International Digital Business Group (“AIDC”)

The performance of international revenues was more impressive, with AIDC's revenue growth of 19% to RMB34.741 billion, and the company's fast-selling and Trendyol, by adopting different business models in different markets, led to operational efficiency gains. Adjusted EBITA amounted to a loss of RMB 59 million and a loss of RMB 3.7 billion in the year to 2024, a loss of 98%. The loss and loss of this Business is the manifestation of the entire cash flow of the Group.

Cloud Intelligence Group

Cloud Intelligence Group generated revenue of RMB 33.398 billion, up 26% year-on-year. Mainly driven by revenue growth in Public Cloud Business, the company highlighted the increase in the uptake of AI-related products, and AI-related product revenues grew by three digits for the eighth consecutive quarter. This AI continues to be a source of growth momentum for the company, with a planned investment of US$380 billion in less than three years, including the autonomous development of domestic AI chips.

though $Alibaba(BABA.US)$ The share price gave a boost to AI chips during the upcoming results conference, but the market is not just about making Bullish chips, but more about competition for large models. Salliwen released the latest Genai Market Outlook for China: Enterprise Scale Model Adjustment Survey, 2025, report shows that China's enterprise-grade modeling usage is growing exponentially, with half-year average usage in 2025 reaching 363% growth in 2024, exceeding 10 trillion Tokens in the future. These massive Tokens usage will not make a big difference for Aries' Data Center Business and long distance competition.

Small summary:

Here are some of the reasons for the rise in the share price of Arie Business:

1. Intensive Competition in the Domestic E-Commerce Industry, While Ari's Revenue and Profits Stay Steady, Showing City's Advantage

2. International E-Commerce Industry loses revenue, regulatory application and market strategy success, gains new growth momentum

3. The demand for AI products is huge, in line with the development trend of domestic chips, favoring the long-term development of data centers and models

Overall, the current multi-dollar business of Aly is facing competition and is worth further revaluing. Looking at the current market PE of TTM is only 16 cents, immediately the share price has risen today, and the valuation reserve can be in the upper range. We recommend that investors continue to be Bullish.

options & technical analysis

Looking at the latest Bovine desktop interface, the market expected a fluctuation of only ± 6.64% in the final results, which undoubtedly completely beat the market expectations this time. After all, after the announcement of the results, the market views on Ali's cash flow and growth will be further positive, lending further appreciation to the impact of AI products.

In terms of technical analysis, the share price (HKD) has broken through the resistance position of $130 on the weekly chart, and the daily MACD has issued a double-bullion Gold cross signal, the share price expansion has risen in the medium term, and the resistance position of the short line key will be this year's high of around $144. The share price will re-enter a rectangular area on the circular chart, as the result of this period may be below $144. The temporary resistance position will move up to the October 2021 high, near the level of 175 dollars.

*The following options and ETF strategy are for investment education only and do not represent any investment opinions

The IV-wave close to the current price is approximately 60~ 70% to the left on the trading floor of Hong Kong shares dated September 5. Looking ahead to today's share price rally, the level of this wave is not particularly high and may lead to some options traders or certifying issuers not being able to match the post-recession price rally. The need to track the share price will lead to an increase in the share price.

You can also view the options analysis function of the bull, for example, refer to ARI250905 140.00 call

In the picture above, due to the expected outperformance of the market, these end-of-day options were immediately used outside the price, but the option money increased by more than 20 cents. More importantly, the rise in historical momentum led to the decline of the wave after far outperformance. It seems that the short-term sentiment of the market is expected to be high, profitable stock price volatility and momentum on the short line. Another angle, for options traders, is that it will be extremely painful in the short term, leading to a volatile short-term downside to pricing, which will lead to a dramatic increase in the risk drama of the stock, which will significantly change the outlook for the weak warehouse.

For investors who are hedged at the same time, the CoverCall value ratio in the Pending Options Strategy is the primary reason why short term downside to the IV is a top consideration. Although there is little risk of loss, you may not be able to take advantage of the opportunity to increase the share price. For the purpose of writing, it will not help much at the moment.

If you are looking for a short-term increase in stock prices, but if you are looking at the apparent increase in today's share price, you can refer to a calendar spread strategy (Calendar Call Spread) by Selling short term call options and buying long term call options (Require the same Strike price )to take advantage of time value differentials to suit the short term stability and long term upside of the asset assets of the forward symbol.

Another method, which is not considered by commodity trusts, is the protective put, which is to buy several options at the same time as the stock, the main thing is to prevent a stock fall and stop for a while in the event of a stock crash, to act as a type of purchase insurance, and not to anticipate the profit from the options money, but to pay the option money after The right will stop or fall out of place at the Strike price when the stock price reverses. The ultimate goal of this strategy is to increase the stock price as a profit bracket.

Finally, the option options for Alibaba Trade in Hong Kong stocks have a contract number of 500 shares, and 500 shares each, equal to 500 shares of Alibaba (5 hands). When executing an options strategy, the number of secured options and the number of shares held is matched when taking out a secured policy strategy.