tradeMONSTER: Trade free for 90 days

Options Trading News

October 29, 2013  Tue 12:14 PM CT

FB: SEE CHART GET CHAIN FIND STRATEGIES

Facebook has been running like a horse, and now traders are collaring gains.

The social-media stock already sees volume of more than 400,000 options, but a single long-term combination in January 2015 dominates the action: More than 58,000 contracts each trade in the 47 puts and the 55 calls traded. A large block of 44,500 contracts saw the calls sold for their bid price of the $8.05 and the puts bought at their $8.35 ask price of $8.35. Volume surpassed open interest in both, so new positions were initiated.

While bearish, the trade was likely done against stock as a hedge. They paid $0.30 and now have protection below $46.80. He or she must also unload their shares for $55 if they close above that level on expiration.

FB rose 0.04 percent to $50.25 in afternoon trading, and has doubled after falling below $24 in July. It hit an all-time high of $54.83 two weeks ago, so today's trade is looking to that level as a top.

The next earnings report is scheduled for after the closing bell tomorrow.

Share this article with your friends


Related Stories

FB

Facebook trade turns quick profits

November 27, 2014

In our Advantage Point newsletter yesterday, we cited a trade idea in Facebook calls that doubled in value in just two hours. Here's how it worked.

Invest Like a Monster - Las Vegas: March 13-14

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

The Art of Trading: Forgiving the Spread

Education & Strategy

Know thy Greeks!

One of the most important roles played by the Option Pricing Model is the calculation of an important family of...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER