Facebook Inc (FB) Options Traders Brush Off BTIG

BTIG said the bar is set "simply too high" on Facebook Inc (NASDAQ:FB)

Jul 22, 2016 at 11:51 AM
facebook X logo linkedin


BTIG downgraded Facebook Inc (NASDAQ:FB) to "neutral" from "buy," explaining lofty expectations have set the bar "simply too high." Additionally, the brokerage firm said the "risk/reward is no longer compelling," and "near-to-intermediate term shortfalls vs. expectations could be painful." FB stock is brushing off this negative outlook, though, and was last seen 0.3% higher at $120.92. Options traders, meanwhile, are blitzing the stock, with volume running at 1.3 times what's typically seen at this point in the day.

By the numbers, around 82,000 call options have changed hands on FB thus far, compared to 43,000 put options. Eleventh-hour speculators are initiating new positions at the weekly 7/22 120-strike call, where data from the International Securities Exchange (ISE) points to a mix of buy- and sell-to-open activity. Call buyers expect FB to extend its run north of the strike through expiration at tonight's close, while call writers are hoping the weekly options expire out of the money.

Widening the sentiment scope reveals call buyers have been active in the weeks leading up to next Wednesday night's quarterly earnings event. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FB's 10-day call/put volume ratio is docked at 1.99 -- it loftiest perch since mid-April. Plus, this ratio ranks in the 79th annual percentile.

This optimism among options traders isn't too surprising, given FB's technical track record. Year-to-date, the stock is up 15.5%, and hit a record high of $122.20 on Wednesday. Plus, Facebook Inc (NASDAQ:FB) has turned in a stellar performance in the session subsequent to reporting earnings over the last three quarters, averaging a single-session gain of 9.1%. Another positive earnings reaction could draw more option bulls to the table, possibly creating a bigger boon for FB stock.

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