Unusual Options Activity: eBay Inc. (EBAY)

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  • Shares of internet auction house eBay (EBAY) have more than doubled off their low set in March. While the move hasn’t been as big as a tech company, at least one trader sees a further move higher.

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  • That’s based on the March 2021 $50 calls. The calls trade about $1.50 in-the-money. Expiring in 81 days, over 11,100 contracts traded against a prior open interest of 184, for a 60-fold move higher in volume.

    The trader paid about $4.40 for the option, so shares would need to trade near $54.50 to profit at expiration.

    Action to take: eBay has performed well this year, but has flatlined in recent months. Shares have sold off a bit going into the holiday season, so this options trade is a bet that shares will rebound after the holidays.

    Activity on the site appears to be up during the holiday season. The March strike date of the option ensures that the full holiday numbers will be known before expiration.

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  • Overall, there’s a lot to like with this trade. It’s a solid price, especially for trading in-the-money. Traders might want to bet on a push higher on eBay following the holiday season, and this looks like an attractive bet. It’s possible that shares move in-the-money by the option’s expiration, but look for a mid-double-digit return as a profit point.