Most Active Options Update: Alibaba Group Holding Limited and eBay Inc.

Option traders have had their sights set on Alibaba Group Holding Ltd (NYSE:BABA) and eBay Inc (NASDAQ:EBAY)

Jun 11, 2015 at 11:38 AM
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The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Two names of notable interest are e-commerce giants Alibaba Group Holding Ltd (NYSE:BABA) and eBay Inc (NASDAQ:EBAY).

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BABA 
has struggled in recent months, giving back over 15% since the start of the year. More recently, the shares have been pressured downward by their 10-day moving average, a trendline that turned them lower earlier today. At last check, the security was off 0.8% at $88.20. 

Even with this dismal price action, option traders have continued to place bullish bets. BABA's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 3.40. This means over three calls have been bought to open for every put during the past two weeks. 

It's the same set-up today, as more than 28,000 Alibaba Group Holding Ltd calls have been exchanged, versus 11,000 puts. There's potential buy-to-open activity taking place at the June 89 call, meaning speculators may be looking for gains above $89 before the close on Friday, June 19, when front-month options expire. 

Looking at EBAY now, the stock has been steadily gaining since touching a 2015 low of $52.54 on Feb. 2. Since early May, the stock has been riding atop its 32-day moving average, and finds itself 0.1% higher today at $60.51. 

Like BABA, there's been a clear bias for EBAY calls at the ISE, CBOE, and PHLX. Across these exchanges, the stock's 50-day call/put volume ratio of 3.58 stands at an annual high. Plus, its Schaeffer's put/call open interest ratio (SOIR) lands at 0.48, which indicates call open interest more than doubles put open interest among options expiring within three months -- and ranks lower than 78% of comparable readings from the past year.

This trend is continuing today, as more than 5,600 EBAY calls have crossed, versus fewer than 3,200 puts. However, instead of just buying to open calls, some traders are exploring a different bullish strategy. That is, it looks like speculators are selling to open the June 60.50 put, betting on the $60.50 level to act as a floor for eBay Inc through next Friday's close. 
 

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