Options Trade – eBay Inc (NASDAQ:EBAY) Calls
Thursday, July 17, 2014

**OPTIONS TRADE: Buy the EBAY Oct 2014 50.000 call (EBAY141018C00050000) at or under $2.80, good for the day. Place a protective stop limit at $1.10 and a pre-determined sell at $5.50.

by Ian Harvey

July 17, 2014


eBay Inc (NASDAQ: EBAY), which is currently the largest online marketplace, released its earnings numbers for the three months through June yesterday afternoon, Wednesday July 16, after the market closed on Wall Street. The company showed earnings per share of $0.69 in the report on revenue totaling $4.4 billion. On today’s market shares in the online marketplace operator were depressed by nervous traders. The company’s stock lost a fraction for the full day to close at $50.70.

Before the release of these numbers analysts following eBay Inc were looking for the company to report earnings of 68 cents per share for the three month period. The quarter, which eBay records as its second of the fiscal year, was expected to bring in $4.4 billion in revenue at the company. In the same three months of last year the company earned 63 cents per share on revenue totaling $3.9 billion.

Growth at the company is being led by its Paypal payments processing subsidiary. That business, which Elon Musk helped to found, is attracting users like no other eBay Inc property and it’s become profitable enough that some investors have called for it to be spun off on its own in order to release value caught up in it.

eBay Inc stock has suffered from several developments this year. The company’s shares have lost more than 7.5% of their value since January 1, but it is starting to trend higher.

Analysts Opinions

The company has been the subject of a number of research reports:-

• Analysts at Susquehanna cut their price target on shares of eBay from $60.00 to $54.00 in a research note on Monday.

• On a related note, analysts at Goldman Sachs reiterated an outperform rating on shares of eBay in a research note on Monday.

• Finally, analysts at Pacific Crest downgraded shares of eBay from an outperform rating to a sector perform rating in a research note on Monday. They now have a $60.00 price target on the stock.

Seventeen equities research analysts have rated the stock with a hold rating, ten have assigned a buy rating and two have assigned a strong buy rating to the company’s stock. The stock presently has a consensus rating of Hold and a consensus target price of $59.36.


eBay Inc. has managed to show better than expected results in most of its most recent reports because the business it’s in is a massive grower. Almost every company in the e-commerce sphere is benefiting in the bulge in the market. This should help increase stock price.

Therefore, based on the facts above the following options trade is recommended…..

**OPTIONS TRADE: Buy the EBAY Oct 2014 50.000 call (EBAY141018C00050000) at or under $2.80, good for the day. Place a protective stop limit at $1.10 and a pre-determined sell at $5.50.

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