28.91 -0.11 (-0.38%) Sell

Don't even consider investing in EBAY now, it is an investor's nightmare

13 min read

EBAY INC has destroyed investor wealth on Friday. It delivered -0.38% to close at 28.91. It is currently trading -37% below it's 52 week high of 46.19.

[Themes containing EBAY]

EBAY showed a strong bearish trend over the last 3 months. During this period EBAY delivered -15.47% and saw a maximum drawdown of -21.67%. There were 3 short signals during this period that returned a cumulative of +11.49% to investors.


EBAY has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 1 Feb, 2018 to 29 Oct, 2018. Over the last 2 years 11 months and 10 days, EBAY underperformed the SP500 index on 48% days. Which indicates that on days EBAY underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months EBAY was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +5.87%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -8.87%) was on Friday, 19 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -16.19% of investor capital.

The last 12 months saw EBAY's investors making profits in 4 months and incurring losses in 8 months. EBAY was less consistent in delivering monthly returs than SP500 index. EBAY was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.7% compared to -7.28% returned by SP500 index in Oct 2018. EBAY had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Mar 2018 to Jul 2018) during which period it delivered -22.94%.

I always said that if I wasn't studying psychopaths in prison, I'd do it at the stock exchange.
-- Robert D. Hare

EBAY is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in EBAY's volatility from 17 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that EBAY has significant positive skewness in it's return distribution. This indicates that investors can expect EBAY to recover from drawdowns quickly. Which makes EBAY a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in EBAY derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than EBAY. Therefore, SP500 must receive a lower allocation than EBAY in your portfolio. EBAY usually has shorter drawdown period than the SP500 index.

Based on your interest in EBAY you may find it interesting to know that AAXN, ZBRA and KEYS are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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