Facebook Stock Takes a Breather After Holiday Outage

The outage has since been fixed

by Patrick Martin

Published on Nov 29, 2019 at 9:48 AM

Thanksgiving is a time to be with family, but when that becomes burdensome, you fire up social media to get out of those unpleasant conversations. Yesterday's respite was likely brief, after Facebook, Instagram, and the messenger app all experienced a holiday outage. Today, Facebook, Inc. (NASDAQ:FB) has restored service, but the stock is down 0.3% in response, last seen trading at $201.47

Despite yesterday's issues, Facebook stock is cruising toward its third straight weekly win, and has only turned in three weekly losses since August. Since taking a sharp bounce off their 200-day moving average in early October, the shares have added almost 17%. On Wednesday, FB turned in its highest close since July 26, and looks ready to take aim at its July 25 annual of $208.66. 

Call trading has picked up as of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FB's 10-day call/put volume ratio of 3.41 ranks 1 percentage point from an annual high, meaning calls have been bought to open over puts at an accelerated clip. Digging deeper, the January 2020 200-strike call saw largest change in open interest during this time frame, with buy-to-open activity detected.

Whatever the reason, short-term FB options are pricing in unusually low volatility expectations at the moment, making it an attractive time to buy premium on the stock. This is per the FAANG stock's Schaeffer's Volatility Index (SVI) of 22%, which registers in the 4th percentile of its annual range.

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