Traders were charging into Facebook with short-term bets on Monday after investment-banking firm Needham raised its price target for the social-networking stock.
optionMONSTER's Heat Seeker system showed bullish activity in several strikes that expire at the end of this week. Calls traded in a strong buying pattern at the December 25.50, 26.50, 27, 27.50, and 28.50 strikes, all well above their respective open interests and therefore new positioning.
Long calls lock in the price where a stock can be bought and can provide significant leverage if the shares rally. Monday's trades are looking for Facebook to hold current levels or rise modestly, depending on the strike and the price of the options purchased. (See our Education section)
FB gained 2.55 percent on Monday to close at $26.93 after Needham raised its price target to $33 from $25 that morning, citing estimates for mobile-revenue growth. Shares had climbed sharply since hitting support around $19 in mid-November but have failed to break resistance at the $28 level.
Total option volume in the name exceeded 88,000 contracts, well above its full-session average despite the truncated holiday session.
(A version of this post appeared on InsideOptions Pro on Monday.)
Options Trading News
Related Stories
FB
Cramer: The irritating inconsistency
June 17, 2013
The lack of follow-through in this market is the new pattern, and it is unnerving after such consistently positive patterns. And the stocks that break down are hideous.
FB
Bulls charge into Facebook at lows
May 24, 2013
Shares of the social-media stock are at their lowest level since November, and buyers are taking a shot on the long side with July calls.
FB
Largest option buying in equities so far
May 24, 2013
Nearing the halfway mark in today's session, here are the individual equity names with the most call and put buying on optionMONSTER's ActionTracker data system.
FB
Trader shows support for Facebook
May 21, 2013
The social-media company is down near a long-term support level this morning, but one trader is giving the stock a vote of confidence.
Social Media
Follow optionMONSTER for news and updates
Premium Services
-
Semi-active traders looking for simple calls and spreads (5 per week).
Learn More -
Entry-to-mid level traders looking for full circle trade analysis (1 per week).
Learn More -
Tailored, one-on-one education designed and led by Jon & Pete (3 months and up)
Learn More
Education & Strategy
Why education is key to options
People get into option trading for a number of reasons, but there are three primary motivations: to increase income, to...
