Calls Pop as Facebook Inc (FB) Retreats

Options traders continue to bet on Facebook Inc (NASDAQ:FB) despite the stock's recent struggles

by Josh Selway

Published on Apr 13, 2016 at 2:01 PM
Updated on Jun 24, 2020 at 10:16 AM

It's been a tough month for Facebook Inc (NASDAQ:FB), with shares of the tech stock down about 6.4% since March 31. Today, the shares jumped to an intraday peak of $112.65 out of the gate -- after the company said it is throwing its hat in the chatbot ring via its Messenger app -- but have since retreated as volume has increased. At last check, FB stock was off 3.4% to trade at $106.85. Still, calls are trading at twice the average intraday volume.

Drilling down, the most popular FB option is the April 110 call. Data confirms traders are initiating long positions here, meaning they're betting on FB to rebound above $110 by week's end, when front-month options expire.

Further down the line, FB's next most popular options are the April 111, 112, and 113 calls, and it looks like traders are buying to open positions here, too. In other words, a number of speculative players have high hopes for the tech stock through the end of this week.

Bulls have been active on FB for some time, though. Specifically, 2.14 FB call options have been bought to open for every put option during the last 10 days, according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). 

Aside from the options crowd, FB is also a favorite among analysts. In fact, there's just one analyst out of the 28 that cover the stock that doesn't recommend buying it. Moreover, FB's average 12-month price target of $134.64 stands in all-time-high territory. 

As mentioned, Facebook Inc (NASDAQ:FB) has struggled from a technical standpoint in recent weeks. But, of course, the shares have outperformed on a long-term basis, almost doubling in value over the past two years. Now, FB's 80-day moving average is coming into play again, a trendline that sent the shares soaring back in March.

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