Weekly Options Hot as eBay Inc. (EBAY) Moves North

eBay Inc (EBAY) is trading higher today in the wake of a price-target hike

by Karee Venema

Published on Feb 26, 2015 at 12:10 PM
Updated on Apr 20, 2015 at 5:32 PM

eBay Inc (NASDAQ:EBAY) is trading higher today -- up 0.4% at $58.57 -- after Baird upped its price target on the shares to $65 from $61, and reiterated its "outperform" rating. In the options pits, weekly contracts are in focus, with a number of speculators throwing in the towel on their bearish bets, while a handful of others are initiating fresh bullish positions.

Specifically, the International Securities Exchange (ISE) has confirmed sell-to-close activity at EBAY's weekly 3/6 58-strike put, as traders exit their positions ahead of expiration at the close on Friday, March 6. Elsewhere, buy-to-open activity has been detected at the equity's weekly 2/27 65-strike call, as eleventh-hour speculators roll the dice on a surge through $65 by tomorrow's close, when the series expires.

Widening the sentiment scope reveals options traders have been upping the bullish ante this month -- a time frame which included rumors of a potential takeover. Specifically, the stock's 10-day ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio has surged to 4.63 from 0.94 at the start of the month. What's more, the current ratio ranks in the 87th annual percentile, meaning calls have been bought to open over puts at a faster-than-usual clip.

As noted, EBAY is heading north today in the wake of some upbeat analyst attention. This just echoes the equity's recent trajectory, with the shares up 10.5% month-to-date, thanks to a sharp bounce off their 200-day moving average on Feb. 2. A continued rise could prompt another wave of price-target hikes, considering eBay Inc's (NASDAQ:EBAY) average 12-month price target of $58.77 is within a chip-shot of current trading levels.

Daily Chart of EBAY Since January 2015 With 200-Day Moving Average

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