Call Players Target Facebook Inc (FB) Amid Oculus News

Facebook Inc (NASDAQ:FB) calls continue to be popular

by Karee Venema

Published on Sep 24, 2015 at 3:09 PM
Updated on Sep 24, 2015 at 3:11 PM

It's a big day in the world of virtual reality (VR), with the second-annual Oculus Connect conference underway in Los Angeles. Specifically, the tech world is buzzing about the new VR gear Oculus -- which was bought by Facebook Inc (NASDAQ:FB) last year for $2 billion -- and Samsung Electronics unveiled, just in time for the holiday season.

The news has FB shares slightly higher -- even though it's not Wednesday -- last seen up 0.1% at $94.07. Meanwhile, in the options pits, traders are showing a preference for calls over puts in today's trading, with both short- and intermediate-term speculators targeting the stock.

Drilling down, eleventh-hour speculators have set their sights on FB's weekly 9/25 85- and 93-strike calls. It seems safe to assume new positions are being purchased, as traders bet on an end-of-week surge for the shares.

Meanwhile, longer-term traders appear to be purchasing new positions at the equity's December 105 call, where 11,000 contracts have changed hands. By buying to open the calls, speculators are betting on a move north of $105 by expiration at the close on Friday, Dec. 18. FB's high-water mark is $99.24, and was hit on July 21.

What's more, FB sports a gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 0.55. This means near-the-money call open interest nearly doubles put open interest among options expiring in three months or less. 

Elsewhere on the Street, analysts are decidedly bullish on Facebook Inc (NASDAQ:FB). In fact, 27 out of 29 brokerages covering the shares maintain a "buy" or "strong buy" recommendation, with not a single "sell" to be found. Plus, the average 12-month price target of $111.60 represents expected upside of 19% to FB's current price. If the stock hits a rough patch on the charts, a round of downgrades and/or price-target cuts could spell short-term trouble.

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