Stocks On the Move: eBay Inc (EBAY) and Etsy Inc (ETSY)

eBay Inc (EBAY) is enjoying a Paypal Holdings Inc (PYPL) halo lift; Etsy Inc (ETSY) is swimming in red ink

Jul 20, 2015 at 2:46 PM
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U.S. stocks are modestly higher this afternoon, as traders take in -- and await -- big-cap earnings reports and a commodities implosion. Among the equities experiencing notable price swings today are e-commerce concerns eBay Inc (NASDAQ:EBAY) and Etsy Inc (NASDAQ:ETSY).

EBAY is enjoying a halo lift from officially independent Paypal Holdings Inc (NASDAQ:PYPL). The shares are shrugging off ratings downgrades from Moody's and Fitch, and were last seen 3.2% higher at $28.79, and just off a post-split best of $29.35 (the stock closed Friday at $66.29). In addition, shareholders are seemingly applauding eBay Inc's reported acquisition of second-hand clothing startup Twice.

Heading into today, EBAY's 14-day Relative Strength Index (RSI) stood at 74 -- in overbought territory. What's more, the stock's short-term options crowd is way more call-heavy than usual, as the security's Schaeffer's put/call open interest ratio (SOIR) sits at an annual low of 0.33.  In other words, near-term calls roughly triple their put counterparts.  

On the flip side, ETSY is falling from grace in a big way. The stock skyrocketed to a two-month high on Friday, thanks to an unexpected nod from Google Inc (NASDAQ:GOOGL), but was last seen 7.7% lower at $20.29. In fact, ETSY touched an intraday low of $18.92, landing on the short-sale restricted list. 

As such, it looks like bears -- and there are quite a few, as short interest represents six days' of pent-up buying demand, at ETSY's average pace of trading -- are turning to the options pits. Intraday put volume is accelerated relative to the norm, and has doubled call volume thus far. It looks like speculators are buying to open the August 20 put, expecting the shares to extend their retreat south of $20 through the close on Friday, Aug. 21, when the newly front-month options expire. 

Today's deflation may have been in the cards, though. In light of last week's GOOGL pop, Etsy Inc's 14-day RSI surged to 77. 

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