Joe Tigay's Facebook Options Trade

Speaking on Bloomberg Markets, Joe Tigay of Equity Armor Investments recommended a buy-write strategy in Facebook Inc FB.

The company is going to report earnings on May 3 and Tigay thinks that it would be a good idea to buy the stock and sell the May 19 expiration, 150 strike call for $3.60. The premium provides him a protection of 2.40 percent in case the stock trades lower. If Facebook closes above $150 at the May 19 expiration, he would have to sell the stock and his selling price would be set at $153.60.