Alibaba Options- The Wait won’t be Long

Published on: Sep 12 2014 by John Critchley

The much anticipated and hyped Alibaba Equity IPO is nearly upon us.  In all goes according to plans, Alibaba ($BABA) will be priced next Thursday September 18th, 2014 and shares will being trading next Friday, September 19th,2014.

For Options traders, we must wait a bit longer.

Normally, the Options Clearing Corp (OCC) has a checklist of criteria before an underlying’s options can be listed.  These include the float of the underlying and the volume of the underlying. This is no doubt these basic requirements will be met by the largest IPO on record.

What happens next in the process?

According to Mary Kearney of the CBOE’… On the 6th business day of stock trading (this would include Friday the 19th so the 6th business day would be Friday September 26th), if all the requirements are met, the CBOE (and other exchanges wishing to list options on BABA) would be expected to petition the OCC to add BABA options.  The OCC would determine which Cycle (Jan-April, Feb-May or March-June), which strike prices would be listed and give approval to list options the following business dayMonday September 29th.  This approval and listing procedure has been around for many years and has worked pretty smoothly.’


So there it is, folks.   Alibaba’s options should be trading  on Friday, September 26th.   Buckle your seat belts as this could be quite a ride.


Stay tuned….

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