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Carter Worth And Mike Khouw's Facebook Options Trade

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Carter Worth And Mike Khouw's Facebook Options Trade

Carter Worth said on CNBC's Options Action he expects a pullback in Facebook Inc (NASDAQ: FB). He analyzed the stock from a technical standpoint and he concluded that Facebook, Apple Inc. (NASDAQ: AAPL), Netflix, Inc. (NASDAQ: NFLX) and Alphabet Inc (NASDAQ: GOOGL) underperformed the S&P 500 in the last six months. They reached new highs, but they haven't done that relative to the S&P 500.

He also showed a chart of Facebook and its trend line. He noticed it's trading at the upper range of its trend channel and he said that it's reasonable to expect a pull back.

Mike Khouw thinks the best way to make a bearish trade in Facebook is by selling the May 140/145 call spread for a total credit of $2.60. The trade breaks even at $142.60 and it can maximally lose $2.40, if the stock jumps to $145 or higher.

 

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