IB Options Brief: eBay, Inc. (EBAY)

Posted April 18th, 2012 by Caitlin Duffy in Unusual Activity

eBay Options Volume Up Ahead Of Earnings

EBAY ñ eBay, Inc.
Options on eBay, Inc. are active today as traders await the Companyís first-quarter earnings report due out after the final bell. Shares in the provider of secure online payment services and online marketplaces are off slightly, trading 0.15% lower on the session at $36.03, as of 12:20 p.m. in New York.

Signs some traders are prepping for a potential post-earnings report pullback in the price of eBayís shares cropped up roughly 15 minutes into the trading day. Put volume at the May $34 strike exceeds 8,000 contracts versus just 322 previously existing positions, with most of the puts having been purchased this morning for an average premium of $0.78 apiece.

Put buyers may be taking an outright bearish stance on the stock, or could be hedging long positions in the shares prior to the earnings release. Traders buying put options outright profit at expiration if EBAY shares drop 7.8% to breach the average breakeven price of $33.22.

Overall options volume on the stock is approaching 45,000 contracts in early-afternoon trading, which is roughly 2.5 times EBAYís 90-day average options volume read at 17,320. Call options are more active than puts at present, with around 1.25 call options trading for each single put option in play.

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