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Options Bulls Are Bidding on EBay

Friday, 10 Jun 2011 | 10:39 AM ET

EBay popped after an upgrade this week, and the bulls are looking for more gains.

OptionMonster's tracking systems detected a quick stream of buyers in the July 30 calls for $1.50 and $1.52 early yesterday, with about 4,000 contracts purchased. The June 30s were also active, with more than 1,400 bought for $0.88 to $1.09.

While volumes were less than previous positioning, this stock has been a fighter and attracted some buying of the October 32 calls earlier this month. Calls outnumbered puts by more than 2 to 1 yesterday, another indication that the sentiment remains bullish.

The stock closed yesterday (Thursday) at $30.66, up 0.29 percent. (See tickerfor today's quotes.) After Pacific Crest Securities raised eBay to "outperform" on Wednesday, shares bounced at their 200-day moving average just under $30 — a level that had been support going back to mid-January.

Pacific Crest said the auction giant could see more than 30 percent upside from here, citing prospects for its core business and PayPal division. eBay is scheduled to announce earnings on July 20, just a few days after the options expire on July 15.

Disclosures:

Pete Najarian has no positions in EBAY.

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.

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