Market Overview

Dan Nathan's Facebook Inc Trade


Dan Nathan spoke on CNBC's Options Action about a trade in Facebook Inc (NASDAQ: FB) that caught his attention.

He said that the options trading volume was not high, as around 70 percent of average daily volume was traded. He noticed that 6,000 contracts of the October 2015 82.50 call options were traded and the seller took a premium of $8.85. Nathan thinks that the seller is a holder of a long position in Facebook and by selling calls he got a protection if the stock drops to approximately $69. If the stock trades below $91.35 at the October 2015, the trader will collect the premium.

Nathan thinks that one of the reasons behind this move is a closing of the WhatsApp deal. A part of the payment will be done with 177 million of unrestricted shares of Facebook and Nathan thinks that might create some selling pressure.


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