Alibaba options will be very active when they start trading on Monday, but they probably will not surpass the standing record of 365,000 contracts set by Facebook’s first calls and puts.
That’s because unlike FB, Alibaba hardly allocated any IPO shares to the public. So BABA holders are primarily institutional, and many of them will have access to over-the-counter options, trading for instance as Carl Icahn and Bill Ackman do directly through the likes of Goldman Sachs, Deutsche Bank, and Credit Suisse rather than on listed options markets.
The opposite was true when individual investors found themselves flush with Facebook shares from its IPO. They panicked with the immediate downturn in the stock and scrambled to buy puts for protection. That’s why we saw such enormous volumes in FB options and why I think that the lack of public allocations will affect BABA option volumes.
— Option Monster