EBAY, SLV Options – Unusual Trading Activity – January 15, 2014
This week we’re taking a look at unusual options trading activity in eBay (EBAY) and iShares Silver Trust (SLV).
As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.
So let’s take a look at some ‘interesting’ activity that caught our eye this week:
eBay (EBAY)
One trader is betting EBAY shares are going to fall after earnings next week (on January 22nd after market close).
EBAY is currently trading for $53.53. The share price is 11% above the 52-week low of $48.06 and is 8% below the 52-week high of $58.04.
This week, a large put spread traded in EBAY in weekly options expiring on January 24th. The $52.50 puts were purchased while the $47.50 strike was sold 5,000 times. The trade cost $1.22 per so it makes money if EBAY falls below $51.28 (all the way down to $47.50).
The most interesting part of this trade is the $47.50 puts were sold for only $0.04. I can’t figure out why a trader would even bother selling puts for such little premium. It certainly doesn’t seem worthwhile versus buying the $52.50 puts outright.
iShares Silver Trust (SLV)
Apparently, not everyone has given up on silver just yet.
SLV, the most active silver ETF on the market, is trading at $19.42. The shares are 9% above the 52-week low of $17.75 and are 38% below the 52-week high of $31.41.
It looks like several investors believe silver has a chance to regain some bullish momentum. This week, over 35,000 March 20 calls were bought for roughly $0.65.
These trades are bullish as the strategy makes money if SLV closes above $20.65 at March expiration. However, that price level is above key technical levels for SLV, so it would be a very bullish result for silver.
More Options Ideas…
That wraps up this week’s unusual options trading and volume…
Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.
We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!
So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!
Yours in Profit,
Gordon Lewis
Category: Unusual Options Trading Activity
