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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)
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The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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