Most Active Options Update: Facebook Inc (FB)

Short-term option bulls have their sights set on Facebook Inc


Published on Nov 3, 2014 at 11:20 AM
Updated on Apr 20, 2015 at 5:32 PM

The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest today is Facebook Inc (NASDAQ:FB), where options players are wagering on the stock's end-of-week trajectory .

Most Active Options Table

Facebook Inc calls more than double puts in late-morning trading. What's more, the stock's 30-day at-the-money (ATM) implied volatility (IV) has edged 0.7% higher to 28.4%, suggesting short-term strikes are active. This theory is corroborated by a look at the equity's 10 most active options -- nine of which expire within the next three weeks.

In the lead is FB's ATM weekly 11/7 75-strike call, where 8,919 contracts are on the tape. Nearly half have crossed at the ask price, IV is up 5.1 percentage points, and volume outstrips open interest, collectively hinting at buy-to-open activity.

In short, these traders expect FB to topple $75 -- a mark just 3 cents from the stock's current perch at $74.97 -- by this Friday's closing bell, when the weekly series expires. More specifically, based on the call's volume-weighted average price (VWAP) of $1, the bullish bettors anticipate the shares will be sitting above $76 (strike plus VWAP) by week's end.

This could be easier said than done, however. There exists heavy call open interest at the weekly 11/7 75 and 76 strikes, which could translate into near-term resistance, as the hedges related to these bets unwind ahead of expiration. In fact, this may even be happening today, as the shares are struggling to topple $75 despite an "overweight" initiation and $90 price target at Morgan Stanley. On a similar note, Facebook Inc's (NASDAQ:FB) 60-day moving average and the $76 area -- both of which formerly served as support appear to now have reversed roles to act as resistance.

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