Facebook (FB) faltered following its highly-anticipated press event and is down 53 cents to $30.41 in very active trading of 116 million shares after the company unveiled Graph Search. The tool will operate within Facebook’s realm and is not Web search, which some had anticipated. Graph Search will initially focus on people, pictures and pages. The stock is now falling to session lows of $30.25 and options volume is a brisk 322,000 calls and 202,000 puts. January OTM 30 puts and 31 calls are the most actives, with more than 30,000 traded in each. Jan 31 puts, 31.5 calls, 32 calls and 33 calls are seeing brisk trading as well. 60 percent of the total flow in Facebook today is in the Jan options that expire in just a few days. There seemed to be expectations for something bigger from Facebook. Indeed, open interest in the calls on the stock reached 1.34 million contracts and new records heading into the event. Now, the trend appears to be sell-the-news. Facebook’s earnings come into focus next, on Jan 30.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.