Options Expert: Heading Into Earnings, Facebook's Path Of Least Resistance Is Lower
Options expert Nic Chahine said options interest implies that Facebook Inc’s (NASDAQ: FB) path of least resistance is lower. Chahine was a guest on Benzinga’s #PreMarket Prep and discussed options strategies heading into Facebook’s earnings.
Chahine sees heavy resistance at $79 and $80, with minimal support at $75. Facebook closed on Tuesday at $75.78. The company is scheduled to report earnings after Wednesday's closing bell.
When asked about his strategy into earnings, Chahine preferred buying a debit put spread and financing that with a credit put spread at a lower strike. Even though traders may expect volatility, Chahine noted that strangles – an options strategy where the trader buys a call and a put at different strike prices but for the same maturity – are expensive.
Check out the full interview below.
Don’t forget to tune in to Benzinga’s #PreMarket Prep broadcast Monday-Friday 8-9:45 a.m. ET for a live, interactive morning show with veteran traders and featured finance industry experts ready to answer your questions for the trading day.
Latest Ratings for FB
|Jan 2017||Pacific Crest||Reinstates||Overweight|
|Jan 2017||Raymond James||Upgrades||Outperform||Strong Buy|
|Jan 2017||Aegis Capital||Initiates Coverage On||Buy|
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