Alibaba options show investors wary ahead of lock-up expiration

By Saqib Iqbal Ahmed NEW YORK (Reuters) - Alibaba Group Holding Ltd's blockbuster IPO has been followed by a steady slide in its stock price, which options market players do not expect to abate, with nearly a fifth of its shares to be released for trading on Wednesday. “It’s a subtle but important sign that investors are more fearful,” said Adam Sarhan, chief executive of Sarhan Capital in New York, who is short Alibaba shares. Of the 437 million shares to be sold publicly, about 100 million will remain subject to trading restrictions that apply to employees until after the company reports results in May. Short interest in Alibaba's shares has risen to 57 million shares as of Feb. 27, up 30 percent since the beginning of the year, according to Thomson Reuters data. Alibaba's options have been busy heading into the lock-up's expiration.

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