Want to Own Facebook Lower – Check Inside

How would you like a chance to own Facebook 12% lower and still win if it rises on the earnings report? It is possible. The options market is pricing in a $3.50 cent move in the stock. You can take advantage of this by trading a Call Spread Risk Reversal. By selling the August 17 Expiry 24 Put for $1 and then buying the August 3 Expiry 27/30 Call Spread for 1.20, it will cost you 20c to have potential for a $2.75 gain next week and or own the stock at 24 on a pullback. Resistance comes into play at 30 as you can see in the chart below, so it will take a lot to leap over it. Not for everyone, but those waiting for it might as well have a shot at the upside too.

Trade: Buy August 3 Weekly 27/30 Call Spread and sell August 17 Expiry 24 Put for 20 cents.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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