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Options Radar: NQ Mobile Inc (ADR), eBay Inc, SeaWorld Entertainment

Reviewing notable options activity on NQ Mobile Inc (ADR), eBay Inc, and SeaWorld Entertainment Inc

by 8/15/2014 2:23 PM
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Three names seeing notable option activity today are China-based mobile security concern NQ Mobile Inc (ADR) (NYSE:NQ), online auction issue eBay Inc (NASDAQ:EBAY), and theme park titan SeaWorld Entertainment Inc (NYSE:SEAS). Here's a look at how today's option traders have been placing their bets on NQ, EBAY, and SEAS.

  • After plummeting out of the gate, the shares of NQ Mobile Inc (ADR) (NYSE:NQ) have clawed their way north of breakeven, up 1% at $6.47. The stock initially reacted negatively to news that NQ Chief Financial Officer KB Teo resigned, effective Aug. 22, due to family reasons, landing the equity on the short-sale restricted list. As such, bears are taking to the options pits today, with intraday put volume running at three times the typical pace. Most of the action has transpired at the September 6 put, where skeptics appear to be buying the options to open, amid expectations for NQ to breach $6 within the next few weeks. From a longer-term perspective, the security is still nearly 56% lower year-to-date, as the firm is navigating allegations of fraud and a late-July buyout bid from Bison Capital Holding Co.

  • eBay Inc (NASDAQ:EBAY) is fractionally lower at $52.90, as traders digest reports that the company's PayPal unit could soon start accepting Bitcoin. While intraday call volume is relatively accelerated, some of those option players are using the contracts to gamble on a ceiling for EBAY. Specifically, it appears some traders are selling to open October 55 calls, amid expectations for EBAY shares to remain south of $55 -- a level not conquered since April -- through October options expiration. Now may not be the best time for premium sellers to strike, though, as EBAY's 30-day at-the-money implied volatility hit a fresh 52-week low earlier today. On the charts, EBAY is down 3.8% in 2014, and is poised to close a third straight session beneath its 10-day moving average.

  • Recently battered SeaWorld Entertainment Inc (NYSE:SEAS) is fractionally higher at $18.07, though the stock is on pace for a 33.5% weekly loss. Nevertheless, intraday call volume is running at twice the norm, with potential buy-to-open activity detected at the September and November 20 calls. Assuming the out-of-the-money calls are being bought to open, the traders have one of two motives: to capitalize on a rebound north of $20, or to hedge their short stock positions. Short interest soared 69.3% during the most recent reporting period, and now accounts for more than a week's worth of pent-up buying demand, at SEAS' average pace of trading.

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