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TP Says...
Friday, May 22, 2020
FB is up nearly 13%, the equivalent of 2.11 standard devs, in the past six days as the market embraces its “Facebook Shop” feature that could boost earnings and news that many employees would be working from home permanently, which will reduce overhead.  All that excitement for a mind-numbing platform that my teenage kids and their friends seem to think is the entertainment equivalent of black-and-white TV.  Not that they’ve ever seen a black-and-white TV, but you get the point.  The question is, as always, is how much more upside is there for FB?  FB’s OTM puts are trading at a premium to equidistant OTM calls, suggesting that the risk is to the downside.  Maybe it is, or maybe it isn’t.  But there’s still enough premium on the call side to make short option strategies interesting.  If you think that all the good news is already baked into FB’s price and that its rally might slow down and even reverse in the next few weeks, you might consider a bearish strategy in FB.  If you are bearish, the short call vertical that’s short the 240 call and long the 242.5 call in the June weekly expiration with 35 DTE is a bearish strategy that collects a credit 1/3 the width of its strikes, has a 74% prob of making 50% of its max profit before expiry and that generates $.54 of positive daily theta. 
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