Buy to open the February 17, 2017 call on Paypal Holdings (PYPL) with a strike price of $41.00 at $1.32 or lower. Symbol (PYPL170217C41)

I expect 2017 to be the year when digital wallets gain traction as payment services partner to consolidate volume. Paypal Holdings is at the epicenter of digital payments. The spin off from Ebay spent the bulk of 2016 fostering relationships with Visa and Mastercard to make its payment system ubiquitous online and in stores.

Paypal’s recent agreements with Mastercard and Visa spooked investors because they feared a drop in profitability due to sharing transaction fees with these credit processing agencies. If management expectations prove correct, higher volume will compensate for the small fee required to share the same payment network as these goliaths.

Paypal’s Venmo service, which facilitates person to person digital payments, has been exploding and is becoming the standard for digital transfers between bank accounts. Although Venmo accounts for just a fraction of Paypal’s revenue base I expect the company to provide more details on its usage growth and its plan to capitalize on its volume.

Paypal’s fourth quarter call is not scheduled yet but typically occurs in the last week of January. The February 17 expiration should capture any move from the earnings call.