Eleventh-Hour Speculators Roll the Dice On Facebook Inc (FB)

Facebook Inc's weekly 11/28 series was in focus on Wednesday

by Karee Venema

Published on Nov 28, 2014 at 10:09 AM
Updated on Apr 20, 2015 at 5:32 PM

Weekly option traders have targeted Facebook Inc (NASDAQ:FB) this week, and Wednesday's session was no exception. In fact, five of FB's 10 most active options expire at today's 1:00 p.m. ET close, and accounted for nearly one-fifth of the total daily volume.

Most active was FB's weekly 11/28 77-strike call, where one speculator in particular bought to open a multi-exchange sweep of 2,191 contracts for $0.77 apiece. The initial net debit of $168,707 (number of contracts * premium paid * 100 shares per contract) is the most the speculator stands to lose, should the stock settle south of $77 at the end of today's abbreviated session. Gains, meanwhile, are theoretically unlimited north of breakeven at $77.77 (strike plus premium paid).

Also receiving notable attention was FB's weekly 11/28 78-strike call, where 15,604 contracts crossed the tape. This activity was split on the bid and the ask sides, and a hefty portion of the volume translated into open interest over the Thanksgiving break -- indicating positions were both sold and bought to open, respectively. This theory is echoed by data from the International Securities Exchange (ISE).

By writing to open the calls, speculators expect FB to finish today's session south of the $78 mark, while those buying to open the calls are betting the stock will rally past this mark. At last check, Facebook Inc (NASDAQ:FB) has surrendered 0.4% this morning to trade at $77.29. Year-to-date, though, the stock is still enjoying an impressive 41.4% lead.


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