Facebook Put Traders Target $200 Level After Trump Tweets

It's been FB call buying that's been popular recently

Josh Selway
Jul 12, 2019 at 11:44 AM
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Facebook, Inc. (NASDAQ:FB) is in focus today after President Donald Trump tweeted about the company's new cryptocurrency Libra, saying he's "not a fan" of cryptocurrencies in general and that the company may need to get a banking charter. This comes as the Senate Committee on Banking, Housing, and Urban Affairs is set to hold a hearing for Libra next week, while Fed Chair Jerome Powell just said the social media's move into crypto poses "serious concerns." At last check, FB shares were flat on the day, quoted at $201.02, but some short-term options traders are trying to make a quick buck on a pullback.

Digging into the data, new positions are opening at the weekly 7/12 200-strike put, which expires today, and others are opening the July 200 put. Those buying the contracts are betting on FB stock moving below the $200 level. The shares briefly dipped below that round-level earlier, but mostly it's acted as a solid level of support in the past three sessions.

The interest in puts goes against the recent trend in the tech giant's options pits. The 10-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 2.40 and ranks in the 84th annual percentile, showing stronger-than-usual demand for long calls recently.

Looking closer at the charts, Facebook has been grinding higher since it announced Libra in mid-June, up 15% in the past month. The 10-day moving average has been solid support in that time, but FB is still staring up at its all-time highs around $218 from last July.

fb stock july 12

 


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