Bulls Applaud eBay Inc.'s (EBAY) Quarterly Profit Revision

eBay Inc (EBAY) call buying has picked up today

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Published on Feb 6, 2015 at 11:36 AM
Updated on Apr 20, 2015 at 5:32 PM

eBay Inc (NASDAQ:EBAY) is up 0.8% today at $54.71, after upwardly revising its fourth-quarter profit by nearly $90 million. The news has options bulls licking their lips, as calls are trading at twice the normal intraday pace.

Jumping right in, speculators are targeting the March 55 and 57.50 calls, with data suggesting mostly buy-to-open activity. These traders are looking for EBAY to eclipse the respective strikes by the close on Friday, March 20, when back-month options expire.

Longer term, the equity's options traders have been extremely put-focused. In fact, EBAY's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio is at an annual high of 2.12. In other words, speculators have bought to open the stock's puts over calls at a faster rate in the past two weeks than at any point in the past year.

Elsewhere on the Street, sentiment is mixed. Of the 26 covering brokerage firms, half rate EBAY a "buy" or better, with the remaining 13 analysts handing out "hold" or worse recommendations.

Recently, eBay Inc (NASDAQ:EBAY) has struggled on the charts. Specifically, the shares have dropped 4.5% since their Jan. 23 peak at $57.28, bringing their year-to-date loss to 2.5%.


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