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Apr 27, 2022
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Here's a chart showing options volume and open interest yesterday for all the 04/29 puts on FB. I do want to point out the increased activity around $150P-$160P. That appears to be what is being priced in by institutional participants.
The vast majority of the open interest looks to be at the $150 strike, while most of the hedging activity looks to be between $150 and $160
Most of the open interest is pricing in a drop. Surprisingly someone has been buying a ton of 04/29 $120P. Maybe speculative apes?
Over the last couple days in the run up to earnings, IV has gone from 40% to 160%, and will likely continue to 200% by market close.
FB is also quite far from its delta neutral (Green line). Most recently, delta neutral has been a point of resistance. That may continue to be true for foreseeable future. Notably, the increased put buying has brought delta neutral down. Source: https://options.hardyrekshin.com/#FB
Current ATM options show the probable range after market close of $166 - $190.50.
I'm anticipating a drop, but still want to make money, so I need to make sure the options contracts I buy are profitable at the $150 mark, which currently represents a 16% decrease from yesterday's close. It's possible all this dropping is priced in from the previous quarter. It's also possible that Meta's headwinds have accelerated and further future statements will paint a more dire picture of the company.
Remember that the cost of IV crush will be massive. So you need to pick a strike price that you reasonably expect will expire ITM.
So with that being said, these are the positions I intend to open before market close:
Unclear to what point I can get fills at these prices, but I'm going to try.