Facebook Options Traders Forecast Blue Skies Ahead

Facebook Inc. FB was trading higher on Friday in an attempt to break bullish from a daily bull flag.

The bull flag, with the pole created between May 19 and May 27 and the flag between May 28 and Friday (June 4), could propel Facebook to a new all-time high if the pattern is recognized by trading algorithms and institutions.

A number of options traders believe Facebook will see new highs in the weeks and months to come with one trader thinking a move towards the $350 mark is possible. Together, these traders bet over $2.12 million Facebook will be a blue-sky runner.

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.

See Also: How to Buy Facebook Stock

The Facebook Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:32 a.m., Friday a trader executed a call sweep, near the ask, of 250 Facebook options with a strike price of $320 expiring on June 11. The trade represented a $216,250 bullish bet for which the trader paid $8.65 per option contract.
• At 9:32 a.m., a trader executed a call sweep, near the ask, of 250 Facebook options with a strike price of $320 expiring on June 11. The trade represented a $217,000 bullish bet for which the trader paid $8.68 per option contract.
• At 9:58 a.m., a trader executed a call sweep, near the ask, of 246 Facebook options with a strike price of $320 expiring on June 11. The trade represented a $255,840 bullish bet for which the trader paid $10.40 per option contract.
• At 10:04 a.m., a trader executed a call sweep, above the ask, of 256 Facebook options with a strike price of $320 expiring on June 11. The trade represented a $273,408 bullish bet for which the trader paid $10.68 per option contract.
• At 10:05 a.m., a trader executed a call sweep, near the ask, of 247 Facebook options with a strike price of $320 expiring on June 11. The trade represented a $265,525 bullish bet for which the trader paid $10.75 per option contract.
• At 10:11 a.m., a trader executed a call sweep, near the ask, of 291 Facebook options with a strike price of $350 expiring on Aug. 20. The trade represented a $277,905 bullish bet for which the trader paid $9.55 per option contract.
• At 10:34 a.m., a trader executed a call sweep, near the ask, of 267 Facebook options with a strike price of $325 expiring on July 16. The trade represented a $347,100 bullish bet for which the trader paid $13.00 per option contract.
• At 10:34 a.m., a trader executed a call sweep, near the ask, of 267 Facebook options with a strike price of $330 expiring on July 16. The trade represented a $275,010 bullish bet for which the trader paid $10.30 per option contract.

FB Price Action: Shares of Facebook traded up 1.7% to $331.74 at publication time.