Facebook Rebound Signaled In Call Option Activity
Call options expiring in May were the most active trades in social media giant Facebook (Ticker: FB) as it rebounded by 3.11% to $60.00 midweek. At the start of the week the shares touched a near three-month low at $55.44 having shed 23.5% since reaching a post-IPO high of $72.59 in March. The 16May?14 60.0 strike call option traded at a premium of $4.35 almost 25,000 times this morning and nearly equal to the established volume of open interest. The calls were likely purchased judging by the sale of 33,725 of the May 65.0 strike call options where open interest stands at 63,200 contracts. The higher strike call options traded at a premium of $2.29 which imply a lower net cost of effectively getting long of the stock. Total options volume on Facebook of 143,000 contracts by 10:40am ET maintains its buoyant bias. Total daily options volume on the stock has exceeded 200,000 contracts each trading session since February 10th.
Chart ? Setback for social media stocks has weighed on broader market ? is it over?
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