Facebook, Inc. (FB) Option Bulls Bet On a Round-Number Breakout

Facebook Inc (FB) calls are popular once again

by

Published on Feb 26, 2015 at 10:53 AM
Updated on Apr 20, 2015 at 5:32 PM

Bullish speculators haven't been able to get enough of Facebook Inc (NASDAQ:FB) lately. Looking at two weeks' worth of data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a call/put volume ratio of 2.90 for the stock, a number that outranks 94% of all similar readings from the past year. The call-focused trend is continuing today, with the contracts trading at twice the usual mid-morning pace.

On a closer look, speculators are targeting the round-number $80 level for FB. For example, the weekly 2/27 80-strike call has seen notable attention, with data suggesting buy-to-open activity. The equity was last seen at $80.60, meaning these calls are now in-the-money. However, for the speculators to see a profit from their bets, the shares need to eclipse the at-expiration breakeven level of $80.97 (strike plus the volume-weighted average price of $0.97) by the close on Friday. FB's intraday high thus far stands a penny above this level.

Another 80-strike that's possibly being bought to open is the March 80 call. These traders are giving the security more time -- through the close on Friday, March 20 -- to accumulate gains above $80.

Option traders are not the only ones who are bullish on FB. On the Street, 27 out of 29 covering analysts say Facebook Inc (NASDAQ:FB) is a "strong buy." It's no wonder, given the equity's long-term success. With today's 1.2% increase, the shares have tacked on roughly 17% over the past 52 weeks.

Daily chart of Facebook Since February 2014

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.
First Week in April Provides More Coronavirus-Related Volatility
A slew of coronavirus-related news sent markets on another weekly roller coaster ride
Netflix Stock Heading into Historically Bullish Quarter
NFLX's 10-day moving average has stepped up as support lately
The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.