This Facebook stock options trading video picks up on the open of 11/4. We were short facebook stock at 50.70 from the previous day, with this closing options position:
- +1 51p 1.25 -2 49p .85 – 11/8 exp
- -2 52.5c 1.00 +1 51c 1.10 – 11/8 exp
- -2 52.5 1.40 – 11/15 exp
- NOTE: There was a mistake on the previous video – I said the strike was 53 and it’s 52.5
The facebook stock had a closing low of 49.72 and was testing support at 49.56:
- Looking to sell 11/15 expiration puts – depending on a confirmed support reject
- IF underlying is 49.70 [after 49.56 reject] – 48 put theoretical value = 1.10 | 47.50 theoretical value = .92
Facebook Stock Option Trading Summary 11/4 – 11/6
11/4 Review
11/4 opened on a small gap down and then accelerated through the 49.56 support price to 48.19
- There was no put buy setup from the 11/1 closing trade scenario
- And the short 50.70 had no addon setup on open move down
From the 48.19 low there was a V up to retest 49.72 from the previous close – that price area was now resistance and it rejected:
- 10:25 49.04 – 60 min-5 min sync mex cross
- 11:00 49.00 FB sell
- There were no option trades done 11/4
- The V move up from support had no setup
- The resumption back into sell could have been done as a stock options combination trade, with a 50 call sell too, which would have worked very well – but this time I just sold stock
11/5 Review
11/5 low 47.51 – broke 48.19 leftside support price
Facebook stock short 50.86 | 49.00
- 8:40 48.25 buy 1 49c .65 – 11-08 exp
- 8:40 48.25 sell -2 47p 1.00 – 11-15 exp
- Partial profits on shorts
- Taking these trades were a combination of the diagonal breakout potential after the reverse
- The 47p -1.00 = 46 – with support at 46.38
- And the 49c buy at .65 with the short put gave short stock protection
- 9:50 exit trailing 49.04 addon 48.28
- Regarding the 11/8 – 11/15 expiration on the call long and call short – this is Tuesday at 8:40, so there is essentially 4 full trading days
- 9:50 exit short 49.08
- 5 min pmd failure still with diagonal breakout potential
- Day trade buy setup but against 60 min
- 60 min mex flow build
- 13:25 Buy facebook stock on reverse 49.60
- 5 min triple top breakout after 49.14 area shifted to support
- 60 min chart [show chart] mex cross but not actual initial reverse
- But when coupled with 5 min timing – very good failure setup of 49.56 inside focus price
11/5 Closing Stock Option Position
- Long facebook stock 49.60
- +1 51p 1.25 -2 49p .85 – 11/8 exp
- -2 52.5c 1.00 +1 51c 1.10 – 11/8 exp
- -2 52.5 1.40 – 11/15 exp
- +49c .65 – 11/8 exp
- -47p 1.00 – 11/15 exp
- Discuss math of +51p -49p ratio short at 47.51
- 46.55 b/e range and short stock
11/6 Review
The facebook buy swing continued on the open and went to a 50.45 high – but it was a pmd high on the 5 min that was synced with the 60 min initial reverse.
The key now is to shift the 49.56 price area back to support. But after the 5 min initial reverse back into sell and a test of the area – there was a lower high and a wedge pattern of the price area.
Although I would have gone short for a day trade – I didn’t want to trade against the 60 min reverse.
11/6 Closing Stock Option Position
I am going to end this video here – the following facebook trades and decisions were made at the end of this chart:
- Hold trailing facebook buy
- Close long 49 call at 1.30
- Buy 49p 1.00 to complete -2 47p 1.00 +1 49p 1.00 short ratio call
- Do nothing with short 52.5 calls
- Price is well below the b/e area, along with 2 resistance points below that too
- And the short calls are covered by the stock regardless
- The effect of the short calls-long puts will give synthetic short protection against the long stock
Be the first to comment