This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Huge Upside Play in Facebook

By Pete Najarian of OptionMonster
 
NEW YORK -- Facebook (FB) hit a record high Wednesday, and the option activity keeps getting more interesting.
 
OptionMonster's tracking systems detected a massive upside trade in the social-media stock, with 45,986 February 55 calls sold and 45,986 June 65 calls bought. The trader is closing the nearer-dated calls and collecting $3.35 in profit while maintaining the potential to earn more if the shares continue to climb.
 
Long calls lock in the price where a stock can be purchased, letting investors cheaply position for a rally. They can also be rolled from one month to another, as this trader did Wednesday, benefiting from a rally without ever owning the shares and staying positioned to profit from further gains.
 
Facebook shares declined 0.62% to $64.45 on Wednesday but at one point hit an all-time high of $65.06 in the session. The mojo has been strong, with this stock up more than 130% in the last year.
 
Wednesday's monster roll was the biggest transaction anywhere in the option market and really skewed Facebook's volumes, with calls outnumbering puts by almost 200,000 to 58,000.
 
Najarian owns FB calls.

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.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $117.55 -0.75%
FB $93.80 -0.36%
GOOG $631.21 0.00%
TSLA $259.99 0.00%
YHOO $36.69 0.00%

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports