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Facebook draws put purchase ahead of earnings

Posted by | January 30, 2013 .

Shares of social media company Facebook Inc fell 3.29 percent to $31.40 and on the options front, an investor recently bought 17,500 March $28 strike puts on the stock for 82 cents per contract, as a new position, said options strategist Frederic Ruffy.

The put purchase comes ahead of the company’s earnings, slated for Wednesday after the market’s close. Facebook options were actively traded this week as well. In fact, the three most actively traded equity contracts across the entire US options market on Monday were the Weekly $34 strike calls, February $35 strike calls, and Weekly $36 strike calls on FB, Ruffy said.

On Tuesday morning, open interest in Facebook options increased by 155,000 contracts which consisted of 94,000 calls and 60,000 puts, according to Trade Alert. Overall volume on Facebook near midday on Tuesday was fairly balanced with 99,000 calls and 100,000 puts crossing the tape, according to Trade Alert. (Reuters)

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