New Options Provide Insights for eBay Investors

New options contracts for eBay Inc. create attractive investment strategies, with potential yield boosts. Investors should consider these options amidst current market conditions.

Date: 27-03-2025

AI Rating: 7

Options Market Overview for eBay Inc. (EBAY)
Recent options for eBay Inc. have presented new investment opportunities, particularly through put and call contracts with specific strike prices that may impact investor decision-making.

Put Options Analysis:
The put contract at the $64 strike price allows investors to purchase shares at a lower cost basis of $62.91 when accounting for the premium. This represents a 5% discount to the current share price of $67.03. Notably, there is a 69% chance the put contract could expire worthless, leading to a yield boost of 1.70% on cash commitment or an annualized 14.46% return.

Call Options Analysis:
The call contract at the $68 strike price offers a premium of $2.26, providing an opportunity for investors to achieve a total return of 4.82% if the contract is exercised, again excluding dividends. The likelihood of this call contract expiring worthless is estimated at 52%, allowing investors to retain their shares while benefiting financially from the premium collected. This situation presents a potential 3.37% extra return or an impressive 28.62% annualized yield boost.

Volatility Considerations:
The implied volatility for the put and call contracts is fairly stable at 33% and 32%, respectively, compared to the actual trailing twelve month volatility of 28%. This indicates consistent market expectations regarding eBay's stock price movements.

Stocks: EBAY