Options Traders Grab Calls Amid Facebook Stock Pullback

Facebook Inc FB has been hanging out near its all-time high of $358.79 for the last 12 trading days.

On Wednesday, the social media giant announced it had begun to rollout its Facebook Pay platform to Shopify Inc SHOP merchants and in August would make the platform available to other U.S. businesses.

Despite the news, Facebook was trading slightly lower Wednesday, in line with the overall markets, but was holding above support of the 21-day exponential moving average and the 200-day simple moving average. This indicates short and longer-term sentiment in the stock is bullish.

Facebook option traders used the pullback to purchase over $1.28 million in bullish call contracts, indicating they believe the stock will launch to a new all-time high over the next few weeks.

See Also: How to Buy Facebook Stock: Outlook & Where To Buy

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

See Also: European Union Delays Tax On Biggest Tech Companies | Benzinga

The Facebook Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:56 a.m., a trader executed a call sweep near the ask of 200 Facebook options with a strike price of $340 expiring on July 23. The trade represented a $268,000 bullish bet for which the trader paid $13.40 per option contract.
• At 10:53 a.m., a trader executed a call sweep near the ask of 202 Facebook options with a strike price of $350 expiring on July 16. The trade represented a $50,096 bullish bet for which the trader paid $2.48 per option contract.
• At 10:55 a.m., a trader executed a call sweep near the ask of 350 Facebook options with a strike price of $350 expiring on July 16. The trade represented a $87,500 bullish bet for which the trader paid $2.50 per option contract.
• At 10:57 a.m., a trader executed a call sweep near the ask of 300 Facebook options with a strike price of $350 expiring on July 16. The trade represented a $69,000 bullish bet for which the trader paid $2.30 per option contract.
• At 11:21 a.m., a trader executed a call sweep near the ask of 427 Facebook options with a strike price of $365 expiring on Aug. 20. The trade represented a $318,969 bullish bet for which the trader paid $7.47 per option contract.
• At 11:33 a.m., a trader executed a call sweep near the ask of 321 Facebook options with a strike price of $350 expiring on Aug. 20. The trade represented a $413,769 bullish bet for which the trader paid $12.89 per option contract.
• At 12:50 p.m., a trader executed a call sweep above ask of 321 Facebook options with a strike price of $355 expiring on July 16. The trade represented a $25,359 bullish bet for which the trader paid 79 cents per option contract.
• At 1:09 p.m., a trader executed a call sweep at the ask of 250 Facebook options with a strike price of $350 expiring on July 16. The trade represented a $51,250 bullish bet for which the trader paid $2.05 per option contract.

FB Price Action: Facebook was trading down 1.12% at $348.16 at last check.