Option Brief: Facebook Inc (NASDAQ:FB) traders are hedging their bets ahead of the company's third-quarter earnings report, which is due after tomorrow's close. In the equity options pits today, FB runs second only to Apple Inc. (NASDAQ:AAPL) in terms of overall volume, with 341,000 calls and 231,000 puts on the tape, outpacing typical intraday option volume by 47%.
Attracting nearly one-quarter of this volume are two long-term strikes ... the January 2015 47-strike put and 55-strike call. Four massive blocks totaling 54,500 contracts have traded on each side, with the calls changing hands at the bid price of $8.05 per contract, while the puts are trading at the ask price of $8.35 apiece.
Data from Trade-Alert indicates that Facebook shareholders are implementing a collar strategy ahead of earnings for a net debit of 30 cents per pair of contracts. This gives the trader the right to sell the stock on a pullback to $47, but caps any upside north of $55, due to the short call. In essence, a collar combines the benefits of a protective put and a covered call. FB is currently sitting at $50.25, so the collar allows for 9.5% of upside.
Facebook Inc (NASDAQ:FB) has only reported earnings five times as a publicly traded company, and has topped earnings estimates three times, matched once, and fallen short on one occasion. Still, post-earnings results generally favor the bulls. In the trading session subsequent to its earnings release, FB has gained an average of 8.4%.作者: not4weak 时间: 2013-10-30 19:21