EBAY Analysis

eBay Inc. (EBAY)

Update 7/21/2017: EBAY gapped downward after earnings were published, and I exited at 45.1% of maximum potential profit

Shares declined by 1.9% over four days, or a -170% annual rate. The options position produced a +82.1% yield on debit for a +7,496% annual rate

EBAY publishes earnings on Thursday after the closing bell.

I shall use options that trade for the last time eight days later, on July 28.

Implied volatility stands at 33%, which is 3.3 times the VIX, a measure of the volatility of the S&P 500 index.

EBAY’s IV stands in the 59th percentile of its annual range and the 91st percentile of its most recent broad movement.

The price used for analysis was $37.06.

Premium: $2.04 Expire OTM  
EBAY-iron fly Strike Odds Delta
Long 41.00 90.7% 11
Break-even 39.04
Short 37.00 50.5% 53
Short 37.00 49.5% 47
Break-even 35.04
Long 33.00 89.4% 9

The premium is 51% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered an order on EBAY as described above. The stock at the time of entry was priced at $198.49.

By Tim Bovee, Portland, Oregon, July 17, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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