TP Says...
Friday, October 16, 2020
With social media in hot water over trying to keep the NY Post story about Joe Biden’s son from spreading too far, too fast, FB dropped 3.5% in the past two days and helped take the market down with it.  But that shows you just how much influence FB has over news and our reaction to it.  Any problems around the election will likely be magnified or dampened by FB.  And regardless of the outcome, FB will still find a way to monetize it.  That’s why you might consider a bullish strategy in FB.  Earnings are coming on Oct 29, and that’s helping to keep FB’s IV up and give it a 45% IV rank.  That’s high enough to make short option strategies interesting.   If you’re willing to take risk trading through earnings and think that FB might rally or at least not fall much further, the short put vertical that’s long the 247.5 put and short the 250 put in the Nov weekly expiration with 42 DTE is a bullish strategy that collects a credit 1/3 the width of its strikes, has a 70% prob of making 50% of its max profit before expiry, and that generates $.47 of positive daily theta.
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