Learn the trade here. Make it on tradeMONSTER

Options Trading News

September 26, 2012  Wed 2:45 AM CT

EBAY: SEE CHART GET CHAIN FIND STRATEGIES
eBay has pulled back from seven-year highs in the last week, and one trader is looking for more downside in the next month.

EBAY fell 2.6 percent to close at $48.03. The online auction giant was above $50 for much of last week, its highest levels since 2005, after trading near $28 last November.

A trader bought 5,000 October 48 puts for the ask price of $1.38 while selling 10,000 October 45 puts for the bid price of $0.43, according to optionMONSTER's Depth Charge tracking system. The volume at each strike was almost twice the previous open interest, indicating that this is a new ratio spread.

The put spread is designed to profit from a moderate decline by mid-October, generating a maximum gain if EBAY falls to $45. Below that level, the trader faces the possibility of assignment and the obligation to buy more shares. (See our Education section)
Share this article with your friends


Related Stories

EBAY

Big eBay position rolled higher

November 3, 2014

The online-auction giant fell to a two-year low after reporting earnings in mid-October but is now trying to break back above its key moving averages.

Premium Services

Webinar Playback

eSignal "Back in Black": Multi-Speaker Free Webinar

Education & Strategy

Some things aren't what they seem

As we scan the Heat Seeker, Depth Charge, and other option-tracking systems, we sometimes see heavy activity in calls and...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER