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Tony Zhang's Facebook Options Trade

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On CNBC's "Options Action," Tony Zhang suggested investors with a long position in Facebook, Inc. Common Stock (NASDAQ: FB) should consider an options strategy.

He said the news has not been particularly strong for the stock last week, as the antitrust suit has spooked some investors. He sees a low risk of a breakout to the downside, as he expects the suit to drag out in the courts for at least two to three years.

To exploit high implied volatility and limited upside potential for Facebook, Zhang wants to sell some covered calls in the name. He wants to sell the January $300 call for $6.75. The trade breaks even at $306.75 or around 12% above the closing price on Friday.

 

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Posted-In: CNBC Options Action Tony ZhangOptions Markets Media

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