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Option Clips: eBay Inc, Adobe Systems Incorporated, and Coach Inc

Reviewing notable options activity on eBay Inc, Adobe Systems Incorporated, and Coach Inc

by 4/30/2014 12:52 PM
Stocks quoted in this article:

One equity generating buzz on StockTwits today is online auction issue eBay Inc (NASDAQ:EBAY). Meanwhile, software concern Adobe Systems Incorporated (NASDAQ:ADBE) and upscale retailer Coach Inc (NYSE:COH) are also popular in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • eBay Inc (NASDAQ:EBAY) is down 4.7% at $52, after issuing uninspiring current-quarter guidance. The stock's 30-day at-the-money (ATM) implied volatility (IV) has suffered a post-earnings plunge of 18.8% to 22.5%, and overall options volume is running at three times the intraday norm. Neutral-to-bullish speculators appear to be gambling on short-term support by selling to open the weekly 5/2 50- and 51.50-strike puts, which have each seen healthy bid-side activity and volume exceed open interest. Meanwhile, volume has topped open interest at the weekly 5/2 52.50-strike call and June 52.50 call, indicating fresh initiations.

  • Adobe Systems Incorporated (NASDAQ:ADBE) is 0.7% higher at $61.36, and at least one options trader appears to be rolling the dice on more short-term upside. Call volume is running at eight times the average intraday rate, and the stock's 30-day ATM IV is 10.6% higher at 30.9%. Most of the action has transpired at the May 62.50 call, where 10,600 contracts have traded -- many in a multi-exchange sweep at the ask price of $0.84 apiece. IV at the strike is trending higher, and volume has topped open interest, hinting at newly bought bullish bets. In order to conquer the strike, however, ADBE -- which has underperformed the S&P 500 Index (SPX) by nearly 12 percentage points during the past two months -- needs to muscle back atop its descending 20-day moving average.

  • Finally, Coach Inc (NYSE:COH) is 2.4% lower at $44.62, after touching a three-year nadir of $43.90 earlier in the session. The stock is extending its post-earnings retreat, and has been relegated to the short-sale restricted list. Against this backdrop, bears are turning to the options pits, with intraday put volume running at five times the norm. Meanwhile, the equity's 30-day ATM IV has popped 5.5% to 21.7%. Digging deeper, it looks like one skeptic bought to open several thousand June 44 puts for the ask price of $1.33 each, betting on more multi-year lows for COH in the next several weeks. Specifically, the buyer will reap a reward if COH is sitting south of breakeven at $42.67 (strike minus premium paid) at the close on Friday, June 20, when back-month options expire.

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