What's behind call action in Facebook
Chris McKhann | email@example.com
FB is up 4.48 percent to $27.49 after hitting a new low of $25.52 on Wednesday. The trouble social-networking stock is on pace to close out the week almost exactly where it started.
Option volume in the name is strong today with more than 175,000 contracts already changing hands, compared with a daily average of 98,903, according to optionMONSTER's systems.
First two blocks of 5,000 June 29 calls traded for $0.40 and then $0.35 against open interest of 11,331. Then the biggest print of 20,000 June 31 calls was sold for the bid price of $0.10. The volume there was twice the open interest and clearly a new position.
All this activity leaves the trader short the June 31 calls, though it is unclear what, if anything, they are traded against. The overall trade could be a ratio spread if the June 29 calls were bought in a new position. But if those lower-strike calls were sold, they could have been a naked bet that shares won't be above that $29 strike price in coming months. (See our Education section)