By Jon "DRJ" Najarian of OptionMonster
NEW YORK -- Someone's going to be laughing all the way to the bank after grabbing Facebook (FB) calls on Wednesday.
OptionMonster's tracking systems spotted the purchase of 16,000 September 80 calls for $1.15 late in the morning. That same person likely followed up with another 7,400 of same for $1.28 a couple hours later. More than 34,000 of those contracts would change hands by the end of the session, almost triple the previous open interest in the strike.
These long calls lock in the price where the social-media stock can be purchased, letting investors cheaply position for a rally. The contracts can also produce significant leverage if shares move in the right direction, but they can also lose value if shares stall or pull back.
Facebook rose 2.92% to $71.29 in regular trading Wednesday. The stock continued to rise in the post-market after earnings and revenue came in better than expected.
Almost 800,000 contracts traded overall in Facebook, more than seven times average amounts.
Najarian is long FB.