Stocks quoted in this article:
eBay Inc (NASDAQ:EBAY) enjoyed a 4.5%, single-day surge yesterday thanks to some well-received acquisition news, which should come as music to one option bull's ears. Speaking of options, total volume finished at more than three times the norm on Thursday, with calls outpacing puts by roughly a 3-to-1 ratio. The session's most popular strike was the November 57.50 call, where 14,810 contracts crossed the tape.
Nearly two-thirds of the activity at that strike transpired just after the opening bell, in a single block trade of close to 9,200 contracts. The deal went off near the ask price, at $1.54 per option, suggesting the lot was purchased. Open interest also increased dramatically overnight, making it safe to assume that bullish bets were freshly minted.
For the bull to profit, he needs eBay Inc (NASDAQ:EBAY) to advance from its current perch at $55.92 to at least $59.04 (strike price plus premium paid), prior to the closing bell on Nov. 15, when the back-month options expire. However, if the shares stall south of the strike -- which they haven't toppled on a daily closing basis since mid-April -- the trader risks losing no more than his original cash outlay.
On Thursday, eBay Inc unit PayPal agreed to purchase Braintree Payment Solutions for a cash sum of $800 million. The Chicago-based startup helps process payments for small businesses like Airbnb and TaskRabbit, and its popularity among younger users strengthens PayPal within a demographic that some speculate it has struggled to reach.
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