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 45,986February 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.