eBay Stock Looks Toward Record Highs as Earnings Loom

The equity is fresh off a record high

Deputy Editor
Oct 27, 2021 at 1:21 PM
facebook twitter linkedin

The shares of eBay Inc (NASDAQ: EBAY) are lower this afternoon, last seen down 1.2% at $77.60, a few hours ahead of the company's third-quarter earnings report, due out after the close today. Below, we will explore some of the options activity surrounding the stock ahead of the event, and look at the e-tailer's performance on the charts of late.

A look at the equity's history of post-earnings reactions during the past two years shows a generally negative response. During its last eight reports, more than half of these next-day sessions were lower, including a 10% drop in April. The security averaged a post-earnings swing of 5.4% during these last eight reports, regardless of direction. This time around, the options market is pricing in a much larger move of 8%. 

On the charts, eBay stock is only a few sessions removed from its all-time high of $81.19. The surge came after an early-October pullback that was captured by the 120-day moving average. EBAY is up 54.5% in 2021.

EBAY Chart October 27

An unwinding of pessimism over in the options pits could fuel additional tailwinds for eBay stock. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.19 sits higher than 77% of readings from the past year, indicating short-term options traders have rarely been more put-biased. 

Similarly, analysts are extremely pessimistic at the moment, meaning an unwinding of this sentiment could put additional wind at EBAY's back. Of the 15 analysts in coverage, 10 recommend a tepid "hold." Plus, the 12-month consensus price target of $74.28 is a 4.3% discount to the stock's current level of trading.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners