In this trading video I want to discuss the facebook stock options combination trades that were done the day after the facebook earnings were released.
This is also the day the trade used to discuss the options position worksheet occurred – that trade was the long 51 put 1.25 that was turned into a ratio put short by selling 2 49 put .85.
So, this video will also give us the opportunity to talk about the ratio put short, along with the other facebook trades.
Although this may look like a clear trading chart, the actually trading decisions were somewhat difficult based on the ‘crazy’ reaction to facebook earnings:
- The big move down into the reverse back up
- The move that was against the 60 minute chart that was in sell
- Wide ranges that I wanted to try and protect that made the option strike selection more difficult
I am starting with the first facebook options trade done on 10/31 that was actually against a facebook stock short. We can talk about the facebook earnings trades further on another video, but the trades were:
- -52.15 -49.75|x 49 on close – because that price level wasn’t protected
- -52.15 was protected and held for earnings
- But I would have done the same 10/31 trades if I was flat
Facebook Stock Options Trading Summary 10/31
10/31 9:20 +48.5c 1.25 -2 46.5p .85
10/31 10:10 +FB 49.30
10/31 11:40 +FB 50.90
10/31 13:35 +51p 1.25 -2 52.5c 1.00 | FB 51.35
- 46.5p buy to close .25
- 48.5c sell to close 3.20
- Still long FB 49.30 trailing shares
10/31 2:50 -2 49p .85 +51c 1.10 |FB 50.25
Open facebook options trades 10/31 close – ratio put short X ratio call short
- +1 51p 1.25 -2 49p .85
- -2 52.5c 1.00 +1 51c 1.10
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