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Option Brief: Facebook Inc (NASDAQ:FB) soared to a fresh record peak yesterday, a move that likely prompted an acceleration of call activity in its options pits. By the numbers, around 440,000 contracts changed hands, representing an 83% mark-up to the average daily pace. Looking closer at the data reveals one speculator adjusted her bullish position, as she anticipates higher highs ahead for FB.
In morning action on the NASDAQ OMX PHLX (PHLX), two massive blocks simultaneously crossed the tape at FB's January 2014 50-strike call and February 2014 55-strike call. The former went off at the bid price of $5.65, while the latter traded near the ask price of $4.60. Trade-Alert indicated the January calls (originally initiated on Dec. 10) were sold to close, while the February calls were bought to open. A change in open interest at the respective strikes confirms that some of the calls were, indeed, rolled up to a higher strike and out to a later date -- one that encompasses Facebook's tentative earnings report.
As touched upon, Facebook Inc (NASDAQ:FB) put in a strong technical performance yesterday, after announcing it will begin testing video advertisements this week. Upbeat analyst notes at Susquehanna and Oppenheimer only stoked the bullish flames. However, Tuesday's upward momentum just highlights FB's withstanding tenacity, as the stock has more than doubled in value on a year-to-date basis. From a contrarian perspective, more analyst-induced tailwinds could be on the horizon, as the consensus 12-month price target of $58.63 stands at a tame 8% premium to FB's current price of $54.24.