Today’s tickers: EBAY, TXN & THC
EBAY - eBay, Inc. – Shares in the operator of online marketplaces kicked off the trading week in rally mode, rising more than 4.5% to $56.75 on Monday morning after the company’s 2015 forecasts at an investor day conference last week spurred a number of analyst upgrades and price target increases. The stock has gained more than 10% during the past two weeks. Short-dated bullish bets initiated on EBAY ahead of the long weekend are paying off for some options traders today. Open interest in the April 05 ’13 $55 strike weekly calls rose by more than 3,000 contracts on Thursday, with much of the volume purchased at an average premium of $0.045 apiece. Today the $55 strike calls are deep in-the-money and changing hands at roughly $1.60 each as of midday in New York. Traders who paid an average premium of $0.45 per contract last Thursday roughly tripled their money over the weekend. Meanwhile, trading traffic in weekly contracts this morning suggests options players are positioning for shares in the provider of online payment services to extend gains in the near term. Bullish traders snapped up more than 1,000 in-the-money calls at the April 05 ’13 $55 strike for an average premium of $1.70 each this morning, and picked up more than 1,000 calls at the higher April 05 ’13 $57.5 strike at an average premium of $0.36 apiece. Traders long the $57.5 strike call options may profit at expiration in the event that shares in eBay rally another 2.0% to top a new 52-week high and breakeven price of $57.86.
TXN - Texas Instruments, Inc. – A burst of put buying on semiconductor maker, Texas Instruments, on Monday morning suggests one or more traders are preparing for the price of the underlying to pullback in the near term. Shares in TXN are down 0.90% today at $35.16 as of 12:00 p.m. ET. The most actively traded contracts on Texas Instruments today are the April $35 strike puts, with volume in excess of 14,500 lots in play versus open interest of 5,141 contracts. The bulk of the put options appear to have been purchased in the early going at an average premium of $0.56 apiece. Put buyers may profit if shares in TXN drop 2.0% from the current level to breach the average breakeven point at $34.44 by April expiration. The bearish bets make money if the stock continues to sell off ahead of the company’s first-quarter earnings report at the end of the month, though the April expiry contracts are set to expire the week prior to that report.
THC - Tenet Healthcare Corp. – Shares in Tenet Healthcare, up more than 130% since this time last year, rose as much as 2.4% to $48.72 on Monday morning. The stock currently trades 0.90% high on the day at $48.00 as of 12:15 p.m., after earlier hitting the highest level since 2005. Traders anticipating new highs for shares in the health care services company in the near term stepped in to buy front month calls on the stock today, with bullish bets taking shape in the April $47 and $49 strike contracts. More than 1,500 in-the-money calls changed hands at the April $47 strike against previously existing open interest of 198 contracts. It looks like most of the $47 calls were purchased for an average premium of $1.95 each, thus positioning buyers to profit in the event that THC’s shares settle above the average breakeven price of $48.95 at April expiration. Roughly 300 of the April $49 strike calls are in play as of the time of this writing, with much of the volume purchased at a premium of $0.80 each. Traders long the $49 calls may profit at expiration given a more than 3.5% rally in the price of the underlying over the current price of $48.00 to top the breakeven point at $49.80.
The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.