Digital payment platform
PayPal Holdings (PYPL) is up 52% over the past year, far outperforming the overall market. One trader sees shares trending higher through the spring.
That’s based on the March 2025 $130 calls. With 99 days until expiration, 10,194 contracts traded compared to a prior open interest of 343, for a 30-fold rise in volume on the trade. The buyer of the calls paid $0.47 to make the bullish bet.
PayPal shares recently traded for about $89, meaning shares would need to rally by $41, or 46%, for the option to move in-the-money. It would also mean shares rocketing past their current 52-week high of $93.66.
The stock is in a strong uptrend, but operationally, PayPal has struggled a bit. Revenues are up by about 6%, but overall earnings declined 1% over the past year. The stock trades at 21 times earnings, about in-line with the overall stock market.
Action to take: Momentum investors may like shares here, given the current uptrend underway. However, investors will need to look for signs of a peak in the months ahead to take profits on the trade. Currently, PayPal does not pay a dividend.
For traders, the March $130 calls are an aggressive play on the current uptrend. The option is unlikely to move in-the-money, but it could still see high double-digit returns before expiration given its low cost.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.