Option Bulls Flood Facebook Inc (FB) as Stock Topples $100

Facebook Inc (FB) has crossed the $100 level to reach a new record high

Oct 23, 2015 at 11:16 AM
facebook twitter linkedin


Benefiting from widespread strength in tech and Internet stocksFacebook Inc (NASDAQ:FB) has finally toppled the $100 mark, hitting an all-time high of $102.15. At last check, the social media stock was 0.9% higher at $100.52. Bulls want more, though, as FB calls are crossing at three times the average pace in the options pits. 
 
Checking the data, the weekly 10/23 and 10/30 series are in high demand, accounting for the equity's 10 most popular contracts. Buy-to-open activity has been detected at several strikes at or above the $100 mark, meaning traders are looking to profit from an extended run into triple-digit territory before the close today and next Friday, when the series expire, respectively.

In recent weeks, however, put buying has been more popular than normal. This is evidenced by FB's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.54, which outranks 86% of readings from the past year. Excluding recently expired October options, the weekly 10/23 96-strike put has been the most popular of its kind during the past two weeks. 

By purchasing the puts to open, the buyers were hoping FB would retreat beneath $96 by today's close. However, the puts are now out of the money, and barring a retreat of roughly 5% this afternoon, will likely expire that way. 

In a similar vein, short interest on the equity saw a dramatic uptick during the two most recent reporting periods, adding over 37%. Considering the combination of pessimism among traders and FB's technical strength, the stock could benefit amid an exit from bears on either front. 

About that technical strength: Facebook Inc (NASDAQ:FB) has now managed to add more than 29% in 2015. What's more, the stock demolished would-be resistance in the $94-$95 region. Going forward, it wouldn't be surprising if the psychologically significant century mark acted as support for the shares. 

What This Election Year Means for Stocks

Ipad with I voted sticker

  


 
Special Offers from Schaeffer's Trading Partners