Facebook, Inc. (FB) Option Traders Eye a Weekly Win

Facebook Inc (FB) calls are popular today

by Karee Venema

Published on Feb 10, 2015 at 10:48 AM
Updated on Apr 20, 2015 at 5:32 PM

Facebook Inc (NASDAQ:FB) is trading higher today -- up 0.3% at $74.67 -- on news the social media giant has launched its Internet.org project, which provides free mobile online services, in India. In the options pits, calls are outpacing puts by a more than 3-to-1 margin, with a number of speculators rolling the dice on more upside through week's end.

Specifically, FB's weekly 2/13 76-strike call has received notable attention, with a number of signs suggesting newly purchased positions. By buying the calls to open, traders expect FB to rally north of $76 by week's end, when the series expires. Delta on the call is docked at 0.26, suggesting a roughly 1-in-4 shot the option will be in the money at Friday's close.

Today's call-skewed session just echoes the withstanding trend seen in FB's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the security's 50-day call/put volume ratio of 2.47 ranks in the 78th annual percentile. In other words, calls have been bought to open over puts at a faster-than-usual clip in recent months.

Technically speaking, FB has put in a strong performance over the long term, adding more than 15% on a year-over-year basis. More recently, the equity has been consolidating atop its 40-week moving average since hitting an all-time peak of $82.17 in late December, a trendline that has ushered the shares of Facebook Inc (NASDAQ:FB) higher from July 2013 onward.

Weekly Chart of FB Since July 2013 With 40-Week Moving Average

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