Short-Term Options Traders Swoop In On Facebook Inc (FB)

Front-month options traders are hot for Facebook Inc (NASDAQ:FB)

Jun 14, 2016 at 10:59 AM
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Facebook Inc (NASDAQ:FB) is brushing off Andrew Left's apparent skepticism of the firm. Although Citron Research's notorious short seller weighed in on FB stock yesterday, the shares are up 0.4% today at $114.43, after the tech titan said its Oculus Touch -- which is expected to launch later this year -- will include 30 virtual reality games. Options traders, meanwhile, are targeting FB's front-month series, with eight of the stock's 10 most active options expiring at this Friday's close.

Specifically, speculators from both sides of the aisle have set their sights on the $115 level, with apparent buy-to-open activity detected at FB's June 115 call and put. For call buyers, the goal is for FB to rally north of $115 by week's end, while put buyers expect the stock to retreat from this level over the next several sessions. Regardless of where the stock settles on Friday, though, risk to both sets of options buyers is limited.

More broadly speaking, put players have been increasing their presence in FB's options pits of late. Drilling down on the past two weeks, the stock's August 75 put has seen the biggest rise in open interest. However, according to Trade-Alert, it looks like most of the action at this deep out-of-the-money strike was of the sell-to-open kind, meaning speculators are eyeing a floor for FB over the next several months.

Technically, FB hasn't explored the area south of $75 since the broad-market swoon on Aug. 24. In fact, the shares took a strong bounce off their rising 200-day moving average that day -- and have been moving higher ever since. What's more, since taking another solid leap off this rising trendline in late January, the shares of Facebook Inc (NASDAQ:FB) have surged 28%, and have more recently found support at their 80-day moving average.

FB daily chart June 14

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