eBay Earnings on Tap
January 19, 2010 4:30 PM
Online Marketplace eBay (NASDAQ: EBAY) is scheduled to report earnings tomorrow after the bell and traders seem to be positioning ahead of that report to the bullish side. I am seeing a lot of activity on the April 25 call line, with a single trade of 15,514 calls bought on the ask for $0.70. This is significantly above open interest of 7,000. At the same time, the April 21 puts were sold 15,514 times, on the bid, for 0.58.
This bullish risk reversal in eBay states that the trader is willing to get long 1.5 million shares at $21 and that the trader believes eBay will break through its recent high of $25.80 and heavy resistance levels around $24.75-$25.00. Using the options allows the trader to voice his opinion in a big way by only ponying up $2,000 instead of $35 million.
