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A Huge Bullish Play in Facebook

 
By Jon "DRJ" Najarian of OptionMonster
 
A huge option player is looking for Facebook (FB) to keep powering higher through the new year.
 
OptionMonster's tracking systems detected the sale of 26,408 January 45 calls for $5.60 and the purchase of 40,000 January 50 calls for $2.40. The trader recovered more than $5 million of capital in this massive transaction and still owns the equivalent of 2.1 million shares through the options.
 
The long calls, which lock in the price where the stock can be purchased, will track the share price closely because they are already in the money. Their premiums will climb if the stock continues to rally but will quickly reverse if shares fall.
 
Facebook  gained 2.88% to close at $50.24 on Tuesday. The social-networking stock is back above its 50-day moving average for the first time since mid-November, having bounced smartly around $43.50 late last month.
 
Total option volume in the name topped 522,000, quadruple its daily average for the last month. Overall calls outnumbered puts by almost 3 to 1.
 
Najarian is long FB.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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