Calls Pop on FB Stock Amid Data-Driven Headlines

Facebook is using data to forecast the spread of COVID-19 and track regional quarantines

Deputy Editor
Apr 7, 2020 at 1:53 PM
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Social media giant Facebook Inc. (NASDAQ:FB) is up 2.1% at $169.14 at last check, despite a report from Reuters that the European Union (EU) antitrust regulators sent out follow-up questionnaire to companies focusing on Facebook's Marketplace. The document touched on ways the platform's online marketplace is unfairly benefiting from its massive collection of user data, suggesting that EU regulators are building up a case against FB. In separate news, Barclays trimmed FB's price target all the way down to $175 from 260.

Meanwhile, Facebook said its Data for Good program, which uses data from the company's collection of apps to inform academic research being used to understand and combat the coronavirus, released three new maps forecasting the virus' spread and showing where people are practicing quarantine regionally. 

The company's headline-heavy day is attracting options bulls. Calls are running at two times the norm today, with 165,000 contracts across the tape so far, compared to 75,000 puts. Most popular are the weekly 4/9 180- and 175- strike calls, with new positions being opened at both. 

Taking a broader look though shows that puts have picked up in popularity in recent weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FB sports a 10-day put/call volume ratio of 0.74, which sits higher than all other readings from the past year. This means long puts haven't been more popular in the past 12 months. 

Mirroring this is FB's Schaeffer's put/call open interest ratio of 0.84. This ratio stands in the elevated 84th percentile of its annual range, implying short-term options players have rarely been more put heavy during this same 12 month time period. 

Conversely, analyst sentiment remains overwhelmingly optimistic. Of the 27 in coverage, 26 call FB a "buy" or better, with not a single sell to be seen. Adding to this, the 12-month consensus price target of $226.53 is a healthy 32.9% premium to current levels. 

Today's pop has FB stock eyeing its highest close in nearly a month, with recent support from its 10-day moving average helping guide the stock further away from its mid-March annual lows. While the stock is still down 16.6% in 2020, it's already up 10.6% for the week, and on track to topple its 30-day moving average since its February peak. 

FB Chart Apr 7

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