Facebook Stock Surges to Record High on Earnings Beat

Options bulls and bears are swarming FB today

Digital Content Manager
Apr 29, 2021 at 11:19 AM
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The shares of Facebook, Inc. (NASDAQ:FB) are up 6.7% at $327.61 at last check, and earlier hit a record high $331.81, after the social media giant blew past Wall Street's first- quarter earnings and revenue estimates. The company attributed the strong results to a surge in ad spending and higher ad prices during the pandemic, as more people turned to online shopping. However, the tech name said Apple's (AAPL) new privacy policies could negatively impact its ad revenue in the future.

Nevertheless, analysts are singing Facebook stock's praises this morning. The security earned at least 19 price-target hikes, including a lofty one from Monness Crespi Hardt to $460 from $375. The brokerage bunch was already bullish toward the equity, with 26 of the 29 analysts in coverage sporting a "buy" or better rating. Plus, the 12-month consensus price of $358.87 is a 10.4% premium to current levels.

Today's pop has helped the security overcome recent pressure at the $315 level. The shares are also getting support from the 30-day moving average, which contained FB's pullback last week. Longer term, the equity carries a healthy 67.5% year-over-year lead. 

The options pits reflect that optimism, with calls high in popularity. This is per Facebook stock's 50-day call/put volume ratio of 2.67 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 82nd percentile of readings from past 12 months. This suggests calls are getting picked up at a faster-than-usual clip.

As of today, options traders are swarming FB in response to its quarterly report. At last check, 223,000 calls and 133,000 puts have crossed the tape, which is six times the average intraday amount. Most popular is the weekly 4/30 330-strike call, followed by the 320-strike put in the same weekly series, with positions being opened at both.

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