The major market indices dipped on Thursday, with bonds and oil rising on the session. Weekly gains remain largely intact, however, with the S&P 500 clinging to territory north of 2,120. Options activity once again reversed course sharply, with the CBOE put/call volume ratio surging back to 0.71 from Wednesday’s two-month low of 0.54. The 10-day moving came in at 0.63.
Among the most notable of Thursday’s most active options, Alibaba Group Holding Ltd (NYSE:BABA) announced plans to speed up delivery services in China, while eBay Inc (NASDAQ:EBAY) released a study showing small-business growth due to its presence in the eurozone.
We’ll take a closer look into the recent action in TSLA, BABA and EBAY.
Alibaba Group Holding Ltd (BABA)
Chinese Internet service firm Alibaba announced plans to speed up its delivery services in China on Thursday. The company has partnered with Cainiao to expand delivery services. Cainiao has said that it will invest $16.1 billion over the next five to eight years in logistics to aid Alibaba’s efforts. Alibaba is looking to expand next-day delivery from its current stable of 34 cities to 50 cities total.
While BABA shares languished alongside the broader market on Thursday, shedding 1.78% on the day, options traders focused on call contracts. Overall, some 143,395 contracts traded on BABA yesterday, with 65% of the day’s volume crossing on the call side. Looking ahead to June series open interest, traders are heavily focused on two particular contracts — the $85 and $90 put and call strikes. Calls are currently more heavily favored, with 60,902 contracts at the June $90 strike, while the June $90 put sports open interest of 49,326 contracts.
Currently, BABA is trading just north of all major open interest levels, finishing at $90.95 on Thursday. In premarket activity, the stock was up fractionally at $91.30 at last check.
eBay Inc (EBAY)
EBAY stock bucked yesterday’s market losses to close up nearly 2%. The shares were bolstered by a study showing small businesses in the eurozone benefitted from the eBay online marketplace. According to the study, more than 130,000 small businesses have sold a combined $20.22 billion in goods on eBay during the past four years.
The report instilled confidence not only in stockholders, but in EBAY options traders. Thursday’s volume swelled to 88,435 contracts, with call options accounting for a hefty 87% of the day’s activity.
Turning toward the June options series, peak open interest is currently resting just in the money, with 11,498 contracts open at the $60 strike. Traders are looking skyward, however, with open interest rapidly growing at the $61.50 and $62.50 strikes, which sport OI of 1,461 contracts and 7,369 contracts, respectively.
Tesla Motors Inc (TSLA)
More buyout rumors for Tesla washed over the Street on Thursday, with Google filling in for Apple Inc. (NASDAQ:AAPL) as the protagonist this time around.
According to said rumors, Google is considering an offer of around $275 per share for TSLA stock. That said, there is very little basis for such talks at the moment, with much of the speculation likely driven by the looming competition between Google’s self-driving cars and the potential synergies with Tesla’s electric vehicles.
Option volume was strong for TSLA stock on Thursday, as 103,316 contracts traded on the issue. Furthermore, some 64% of yesterday’s activity crossed on the call side. Any hint at legitimacy for buyout talks should send these trading figures soaring to record levels.
Taking a look at June open interest figures, put activity currently holds sway. Peak open interest totals 21,617 contracts at the deep out-of-the-money $150 strike, though these contracts have likely been open for some time. Nearer the money, 8,551 call contracts currently reside at the June $250 strike, with another 4,854 calls open at the June $265 strike.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
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