Options Bulls Eye PayPal Stock After Investor Builds Stake

Year-to-date, PayPal stock is still down more than 59%

Digital Content Manager
Jul 27, 2022 at 10:14 AM
facebook twitter linkedin


PayPal Holdings Inc (NASDAQ:PYPL) is up 7.3% to trade at $82.63 this morning, brushing off a price-target cut from $190 to $145 at Berenberg. Instead, the fintech stock is higher after Bloomberg reported Elliott Investment Management is building its stake in the company, amid plans to push for ramped up cost-reduction efforts. The move could make the activist investor one of PayPal's five largest shareholders down the line.

PayPal stock has consolidated below the $90 level since May. Despite a 19% quarterly gain and bounce off a June 30, five-year low of $67.58, the shares are still off 59.1% year-to-date and are seeing today's rally stopped short at PYPL's 80-day moving average.

Although calls still outnumber puts on an absolute basis, the equity's 50-day put/call volume ratio of 0.51 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the elevated 82nd percentile of its annual range. This means long puts have been getting picked up at a quicker-than-usual clip in the last two months.

Options bulls are piling on today. So far, 23,000 calls have crossed the tape, which is double the intraday average, as opposed to 12,000 puts. Most popular is the 7/29 85-strike call, followed by the 90-strike call in the same series.

Those options traders are in luck, as the security's Schaeffer's Volatility Scorecard (SVS) sits at a 92 out of 100. This means PYPL has exceeded option traders' volatility expectations during the past year.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners