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Options Expert: Heading Into Earnings, Facebook's Path Of Least Resistance Is Lower

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Options Expert: Heading Into Earnings, Facebook's Path Of Least Resistance Is Lower
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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

DateFirmActionFromTo
Apr 2017Credit SuisseMaintainsOutperform
Mar 2017BarclaysInitiates Coverage OnOverweight
Mar 2017BTIG ResearchUpgradesNeutralBuy

View More Analyst Ratings for FB
View the Latest Analyst Ratings

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