eBay Inc. (EBAY) is a California based e-retailer that provides auction and traditional sales services to merchants, as well as providing payment processing services related to these transactions. The eBay brand umbrella also includes well known services such as Stubhub and Half.com. At the time of this post (12:30PM CST), EBAY is currently trading at 54.76, down 1.77% on the day. The stock is still trading within the upper portion of its 52 week range of 46.34-59.70, despite pulling back after recently testing the 58.00 resistance level on a daily chart.
Earlier this morning at around 10:47AM CST, OptionHacker detected and flagged some unusually bullish options activity in the EBAY Jan ’15 56.0 strike calls. Over 4,000 of these calls were purchased above the ask for 0.52, a large opening position that went off against an open interest of just over 3,500 contracts in the strike. With an initial cash outlay of approximately $211,900 pre-commission, we can surmise that a trader is establishing a bullish position in the EBAY options, looking to profit on a reversal of the recent pullback bynext Friday’s weekly option expiration. With the stock currently trading below 55.00, this trader is expecting a strong rebound back towards the recently tested highs within the next two weeks.
Trade: I bought 200 of the EBAY Jan 56 Calls for $0.54
Risk: $54 per 1 lot
Reward: Unlimited
Breakeven: $56.54
Regards,
Andrew Keene
KeeneOnTheMarket.com
