27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Facebook Inc (NASDAQ:FB) stock made a new all-time high Monday morning following seven months of sideways consolidation.
The stock reached its last all-time high of $304.67 on Aug. 26, 2020.
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During a seven-week long tech rout in which Apple Inc (NASDAQ:AAPL) stock fell almost 20% from its all-time high and Tesla Inc (NASDAQ:TSLA) stock lost 40% of its value before beginning to rebound, Facebook has been a tech outlier, with its shares rising 20% over the last five weeks.
Facebook option traders may be betting on a further move to the upside as the stock moves into new all-time high territory where there are no previous resistance zones.
Related Link: Facebook Faces Internal Criticism Over Promoting China State Propaganda On Uyghurs: WSJ
The Facebook Trades: At 9:30 a.m., Monday a trader executed a call block of 100 Facebook options with a $290 strike price expiring on April 16. The trade represented a $144,000 bullish bet for which the trader paid $14.40 per option contract.
At 9:31 a.m., a trader executed a call block of 150 Facebook options with a $290 strike price expiring on April 16. The trade represented a $207,800 bullish bet for which the trader paid $13.85 per option contract.
At 9:32 a.m., a trader executed a call sweep of 433 Facebook options with a $305 strike price expiring on April 9. The trade represented a $160,200 bullish bet for which the trader paid $3.70 per option contract.
At 9:32 a.m., a trader executed a call sweep of 928 Facebook options with a $305 strike price expiring on April 9. The trade represented a $361,200 bullish bet for which the trader paid $3.89 per option contract.
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At 9:32 a.m., a trader executed a call block of 439 Facebook options with a $250 strike price expiring on April 9. The trade represented a $2.33-million bullish bet for which the trader paid $53 per option contract.
The traders are collectively betting over $3.2 million that the share price of Facebook is going higher.
Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price.
A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.
These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.
When a block trade occurs, it indicates a hedge fund or institution has taken an options position.
A block trade always involves large sizing and is typically handled by a blockhouse outside of the open market. Since block trades don’t occur on the open market, the large size of the trades doesn’t create volatility in the stock being traded.
Like sweepers, blocktrades indicate “smart money” has entered a position.
FB Price Action: Shares of Facebook were trading up 3.8% at $310.02 at last check.
Related Link: Personal Data Of 533 Million Facebook Users Reportedly Made Available Online For Free
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.