Call Volume Soars as eBay Inc. (EBAY) Makes History

eBay Inc (NASDAQ:EBAY) hit an all-time peak today, thanks to a price-target hike at KBW

by Karee Venema

Published on Jun 1, 2015 at 2:27 PM

A number of big names are hitting notable highs thanks to some upbeat analyst attention, and eBay Inc (NASDAQ:EBAY) is no exception. The stock notched a record peak of $63.03 earlier, after KBW raised its price target to $70 from $65. The positive price action has sparked a rush of call activity in EBAY's options pits, with the contracts crossing at four times the average intraday pace, and a number of speculators calling for even higher highs by week's end.

Specifically, the security's weekly 6/5 63-strike call has received notable attention, and it seems safe to assume that new positions are being purchased here. By buying the calls to open, the goal is for EBAY to rally north of the strike by Friday's close, when the weekly series expires. Amid today's pop, delta on the call has more than doubled since last Friday's close, and is currently docked at 0.46.

Widening the sentiment scope reveals call buyers have been active in EBAY's options arena in recent months. In fact, the stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.23 sits just 3 percentage points from a 52-week peak.

Elsewhere, EBAY's Schaeffer's put/call open interest ratio (SOIR) of 0.46 ranks lower than 80% of all comparable readings taken in the past year. Simply stated, short-term speculators are more call-heavy than usual toward EBAY.

Technically speaking, EBAY has been charting a path steadily higher since bottoming at a nearly two-year low of $46.34 in mid-October, up 36%. What's more, the stock powered through previous resistance in the $61 area on Friday, and was last seen up 2.6% at $62.95. Off the charts, eBay Inc (NASDAQ:EBAY) said former Pimco exec Daniel Tarman will serve as the company's chief communications officer once the PayPal split is complete.

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