Ebay Puts Are Popular on Concern About Stock Value, U.S. Probe
NEW YORK -- Defensive puts traded actively across many sectors as investors worried about the economic consequences of a prolonged war and the impact on corporate earnings.</br></br>Stocks slipped as investors found few reasons to buy. The Chicago Board Options Exchange market volatility index, or VIX, rose 1.19 to 33.37. This fear gauge had eased when the war in Iraq began, although the decline slowed last week as investors confronted the prospects of a longer-than-anticipated war.</br></br>Puts traded briskly in eBay Inc. The online retailer had risen to a 52-week high of $90.44 last week, prompting some market watchers to question whether the stock is overvalued. The jitters were exacerbated when the company said its PayPal operation is under investigation by the Justice Department for possible violation of the Patriot Act.</br></br>The stock fell $3.98 to $85.31 in 4 p.m. Nasdaq Stock Market trading. Its April 85 puts traded 11,319 contracts, compared with open interest of 10,197 contracts, and gained $1.40 to $2.75 at the CBOE.</br></br>Altria Group's options were among the most heavily traded, with some nervous investors buying puts and selling calls after its Philip Morris USA division said it can't afford a $12 billion court-ordered bond to appeal a tobacco judgment in Illinois.