Facebook, Inc. (FB) Bulls Roll the Dice on an Earnings Win

Facebook Inc (FB) announced a new Super Bowl ad strategy today

by

Published on Jan 28, 2015 at 1:31 PM
Updated on Apr 20, 2015 at 5:32 PM

Facebook Inc (NASDAQ:FB) is up 2.1% this afternoon at $77.38, ahead of this evening's highly anticipated earnings report. Options are flying off the shelves, too, at a rate more than twice the intraday norm.

At least one group of traders is expecting a post-earnings lift for FB. Specifically, buy-to-open activity has been detected at the weekly 1/30 79-strike call. In other words, the buyers expect the social media stock to topple $79 by this Friday's close, when the weekly series expires. FB hasn't settled north of here since Dec. 30, though; as such, delta on the out-of-the-money call is just 0.43, or 43%.

On the sentiment front, calls have been the options of choice in recent weeks. FB's 10-day call/put volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) checks in at 2.53 -- higher than 70% of all other readings from the last year.

This optimism is understandable, given FB's longer-term technical tenacity. On a year-over-year basis, the shares have tacked on about 45%. Lastly, in today's news, Facebook Inc (NASDAQ:FB) announced it will sell targeted ads during this Sunday's Super Bowl, focused on what people are discussing in real time.


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