Facebook Inc (FB) Options Traders Bet On Higher Highs

Facebook Inc (FB) options traders are anticipating higher highs, amid a tech rally and after the latest Messenger user stats

Jul 20, 2016 at 3:02 PM
facebook X logo linkedin


Amid a broader tech rally, the shares of Facebook Inc (NASDAQ:FB) hit an all-time high of $122.20. In addition, Facebook Messenger just hit the 1-billion-user mark -- joining Facebook and fellow FB-owned WhatsApp, as well as Alphabet Inc's (NASDAQ:GOOGL) YouTube -- with users doubling in less than two years. Against this backdrop, FB options traders are rolling the dice on even higher highs in the near term.

FB calls are crossing the tape at 1.5 times the average intraday pace, and are outpacing puts by a margin of nearly 2-to-1. Most active is the stock's weekly 7/22 122-strike call, which it appears some traders are buying to open. By purchasing the calls to open, the buyers expect FB to extend its ascent north of $122 through the end of the week, when the options expire.

However, during the past 10 weeks, it's been FB puts that have grown increasingly popular among buyers. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio of 0.63 is higher than 88% of all other readings, pointing to a healthier-than-usual appetite for long puts over calls.

Whether those buyers are "vanilla" option bears or simply trying to protect their surging FB shares, one thing is clear: the stock's near-term options are still attractively priced ahead of next week's earnings report. The equity's Schaeffer's Volatility Index (SVI) of 31% is in just the 39th percentile of its annual range, hinting at historically muted volatility expectations.

On the charts, Facebook Inc (NASDAQ:FB) shares have marched steadily higher since mid-2013, climbing atop their 10-month moving average. At last check, the stock was up 1.2% at $122.06. Off the charts, the company has enjoyed a positive single-session post-earnings reaction in each of the past three quarters.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI