As of February 20, 2025, $Alibaba(BABA)$ $BABA-W(09988)$ is scheduled to announce its December quarter 2024 financial results before the U.S. market opens.
Alibaba Group Holding Limited (9988.HK) has recently exhibited notable technical movements:
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Breakout from Extended Base: The stock surpassed a 2.5-year consolidation phase, with the upper boundary at HKD 120.
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Retest of Support Level: Following the breakout, the price retraced to the HKD 120 level, now acting as support.
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Increased Rally Volume: The recent upward movement was accompanied by higher trading volumes, surpassing those of previous rallies.
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Trading Alibaba’s earnings
Earnings announcements drive volatility as investors react to results and guidance, causing sharp price swings. This unpredictability increases risk, with stop-losses triggered unexpectedly and price gaps leading to slippage. Implied volatility also rises, making options pricier.
Utilizing Daily Leverage Certificates (DLCs) During Earnings
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Lower Capital Requirement: Instead of buying Alibaba shares directly, traders can use long DLCs for bullish exposure or short DLCs for bearish bets at a lower cost.
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Limited Losses: The maximum potential loss is the purchase price of the DLC, unlike margin trading, where losses can exceed the initial investment.
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Amplified Gains & Losses: DLCs provide leverage, meaning both profits and losses are magnified compared to the stock’s movement.
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Earnings Volatility: Alibaba’s stock can swing significantly after earnings, making DLCs a flexible tool to capitalize on price moves without owning shares.
At the time of writing, the Alibaba 5xLongSG251113 DLC $Alibaba 5xLongSG251113(DKPW.SI)$ is priced at $0.72 per unit, while the Alibaba 5xLongSG250904 DLC $Alibaba 5xLongSG250904(DISW.SI)$ is priced at $0.168 per unit. With a minimum trade size of 100 units, the total cost of entry would be $72 and $16.80, respectively (excluding brokerage fees and other charges).
If the trade moves against the trader, the maximum possible loss is limited to the initial investment—$72 or $16.80, plus any additional trading-related fees. This makes DLCs a cost-effective way to gain leveraged exposure to Alibaba’s price movements while capping downside risk.
Alibaba short DLC: $Alibaba 5xLongSG250924(9O5W.SI)$
For more information about DLCs, visit https://dlc.socgen.com/en/education/handbook
Disclaimer:
This document is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. This document has been published for general circulation only.
This advertisement has not been reviewed by the Monetary Authority of Singapore. This post is sponsored by Societe Generale, Singapore Branch. The content of this article does not form part of any offer or invitation to buy or sell any daily leverage certificates (the “DLCs”), and nothing herein should be considered as financial advice or recommendation. The price may rise and fall in value rapidly and holders may lose all of their investment. Any past performance is not indicative of future performance. Investments in DLCs carry significant risks, please see dlc.socgen.com for further information and relevant risks. The DLCs are for specified investment products (SIP) qualified investors only.
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