Option Buyers Profit in $FB

Option buyers banked a nice profit in Facebook (FB) within 2 days, on both downside and upside moves for the week ended Jan. 25th.

In our TNT Option trading service we covered how the stock price of Facebook (FB) was consolidating below its 100-day SMA and setting up for a nice move. We analyzed this stock on January 22nd when the stock opened at $149.20, below the $150.00 flat-line and its 100-day SMA. After reaching an intraday low on Tuesday of $146.37, the stock ended up closing at $147.57, still well below the entry flat-line and moving average. Wednesday brought additional selling right from the open, where FB shares traded down to the first downside target of a flat-line in the $144.00 area, providing an opportunity to roll to a lower delta option to lock in profits, and the stock would ultimately fall to a price of $143.06. The close on Wednesday as well as the opening bounce off support at the $144.00 flat-line Thursday morning then provided an opportunity to pivot to upside positions, where Facebook’s share price would run up about 6 points to once again be stifled by the $150.00 region.

Some of our traders played the downside and follow-through bounce and made returns as high as 85% with a 45% average!

So even with a variety of moves in the underlying, option traders managed to make significant returns using FB’s options.

Congrats on the profits, all!

Join Ron Ianieri next week to analyze the next opportunity!