$FB has supposedly exposed some records. If history repeats itself we can bet on panic buying to set in and history does repeat itself. $FB opened flat and then took off premarket and didn’t look back.
To take advantage of the situation we’re going to sell a put vertical. We were only able to get filled near the close of market due to the up move but we’re in.
SELL -1 VERTICAL FB 100 17 MAY 19 165/160 PUT @1.14 LMT
We have a GTC in for 25% and plan to be out before expiration.
The activities of Mark Zuckerberg’s lobbying firm, FWD.us, has angered some liberal groups. Sellers have stepped in now that earnings are over and this may add a drop or two of fuel to the fire. If holds at $25 FB could be a long trade.
This is another example of using small sized strangles as an income strategy. This is an Aug 27/39 Strangle in $FB. The trade was opened on 6/27 for a .95 and .70 credit on the two strikes. Implied Volitility for August was at 62%. These two strikes were selected at the 20 Delta level. The area on the risk graph is very wide giving a good chance for being successful. One week after putting the trade on there’s approximately a 30.30% gain due to Theta and a 5% reduction in volatility.