Posted by: sakiacapital | September 22, 2012

Facebook

If FB pulls back to 18 after Nov stock lockup, the Call Ratio Spread may seem an interesting strategy, as long as “Mobile” and “Search” pan out.

Posted in Derivatives

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Responses

  1. Mr. Barrons's avatar

    Could be riskier given the premium “eeked” out by this strategy…going into Q3 earnings, the stock could move up more than expected…what about a 3:1 bear call spread to play a sharp pop out of any earnings surprise while making the trade free ?

    By: Mr. Barrons on September 24, 2012
    at 5:58 pm

    Reply

    • sakiacapital's avatar

      Depends on what strikes you buy and sell, if the stock gets back to 18, you can buy in the 20-25 range and sell the 28-33 range. It’s just a trading flyer on FB, if mobile or search pans out and some good news comes out of earnings. If nothing, at least it is negligible cost. 3:1 is a lot dangerous, because of the leverage. Here you are buying one and selling two, compared to 3. Personally, I prefer GOOG, AMZN, and AAPL to FB even YHOO looks interesting right now, with all the changes. Any pullback, buy the tech trio. Cheers…..

      By: sakiacapital on September 25, 2012
      at 5:51 pm

      Reply


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