If you know me at all, you know I am NOT a fan of Facebook.
At the risk of sounding like an old curmudgeon, I just don’t get it.
I’m obviously in the minority when there are 1.82 billion daily active users who spend on average 38 minutes a day on Facebook.
Like I said, to each his own …
Let’s make some money in Facebook!
Looking at the Facebook (Ticker: FB) stock chart, Thursday’s candlestick has formed a doji.
Remember, a doji appears at the top or bottom of a trend and can signify the end of that trend.
The FB doji is at the top of an uptrend forming since March 9.
If FB opens today lower than Thursday’s close of $298.66, this will confirm the doji and FB will trade lower.
I like buying a put spread in the Apr16 cycle, which still has two weeks to go, but I will not be paying any extra premium for all that extra time. I don’t think I need it.
I like buying the Apr16 292.50 puts with an implied volatility of 28.04 and selling the 282.50 puts with an implied vol of 29.87.
I will pay $2.40-$2.45 for the Apr16 292.50/282.50 put spread.
I will take my loss if the spread trades down to $1.65. And I will take my profits as the spread begins to trade $3.55 and higher.
I think FB has the potential to trade back down to the $280 area where it traded just over a week ago.
Just don’t fall into that social media trap!
Thanks for Reading … See You Next Tuesday!