FB - Facebook - Company Description
Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide. The company's products include Facebook that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, a community for sharing photos, videos, and messages; Messenger, a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices; and WhatsApp, a messaging application for use by people and businesses to communicate in a private way. It also provides Oculus, a hardware, software, and developer ecosystem, which allows people to come together and connect with each other through its Oculus virtual reality products. As of December 31, 2018, it had approximately 1.52 billion daily active users. The company was founded in 2004 and is headquartered in Menlo Park, California. Company description from FinViz.com.
Facebook has been under the gun so to speak for all of 2019. Regulators are looking at various privacy issues and misuse of user data. Facebook has set aside $5 billion in case regulators level a major fine. They have tens of billions in cash so a fine double or triple that would be painful but not fatal.
Shares have returned to the $195 level and a breakout over $200 appears imminent as long as the market cooperates. We could see some short covering and price chasing over that $200 level.
Options are expensive and there are only two ways to play this. You can turn it into a spread, say the $200/$220 call with a net debit of $7.00 but you limit your upside to about $7. If you have the capability to sell a put to offset the call price your upside is unlimited.
Buy Jan $200 call, currently $14.75, stop loss $183.85.
Sell short Jan $175 put, currently $8.55, stop loss $183.85.
Net debit $6.20.