Facebook Stock Puts In A Bottom, Options Traders Bet Big On Further Upside

Facebook Inc FB fell 11% lower between Sept. 10 and Sept. 22 when it created a bearish double top pattern near its Sept. 1 all-time high of $384.33.

A recent report stating employees were suffering from the mental health effects of Instagram as well as a blog post wherein Facebook announced it had underreported ad performance on Apple, Inc AAPL iPhones by about 15% pushed the stock down to a support level.

The support level at $339.92 provided a dip-buying opportunity and the stock closed slightly up from the area. Facebook’s relative strength index (RSI) hit 30% on Wednesday, which put it into oversold territory and when the stock bounced up on Thursday options traders began hammering bullish call contracts. Together the traders bet over $4.53 million Facebook will bounce up further north over the following weeks and months.

See Also: How to Buy Facebook Stock: Outlook & Where To Buy

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The FB trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:46 a.m., a trader executed a call sweep near the ask of 300 Facebook options with a strike price of $350 expiring on Oct. 1. The trade represented a $144,000 bullish bet for which the trader paid $4.80 per option contract.
• At 9:48 a.m., a trader executed a call sweep near the ask of 212 Facebook options with a strike price of $325 expiring on March 18, 2022. The trade represented a $901,000 bullish bet for which the trader paid $42.50 per option contract.
• At 10:00 a.m., a trader executed a call sweep near the ask of 200 Facebook options with a strike price of $330 expiring on Sept. 24. The trade represented a $325,000 bullish bet for which the trader paid $16.25 per option contract.
• At 10:01 a.m., a trader executed a call sweep near the ask of 250 Facebook options with a strike price of $340 expiring on March 18, 2022. The trade represented a $845,000 bullish bet for which the trader paid $33.80 per option contract.
• At 10:04 a.m., a trader executed a call sweep near the ask of 275 Facebook options with a strike price of $350 expiring on Oct. 1. The trade represented a $122,100 bullish bet for which the trader paid $4.44 per option contract.
• At 10:13 a.m., a trader executed a call sweep near the ask of 401 Facebook options with a strike price of $340 expiring on Sept. 24. The trade represented a $354,885 bullish bet for which the trader paid $8.85 per option contract.
• At 10:13 a.m., a trader executed a call sweep near the ask of 246 Facebook options with a strike price of $345 expiring on Sept. 24. The trade represented a $118,080 bullish bet for which the trader paid $4.80 per option contract.
• At 10:14 a.m., a trader executed a call sweep near the ask of 591 Facebook options with a strike price of $350 expiring on Oct. 1. The trade represented a $295,500 bullish bet for which the trader paid $5 per option contract.
• At 10:16 a.m., a trader executed a call sweep above ask of 250 Facebook options with a strike price of $340 expiring on Oct. 1. The trade represented a $296,500 bullish bet for which the trader paid $11.86 per option contract.
• At 10:17 a.m., a trader executed a call sweep near the ask of 248 Facebook options with a strike price of $340 expiring on Oct. 1. The trade represented a $289,168 bullish bet for which the trader paid $11.66 per option contract.
• At 10:20 a.m., a trader executed a call sweep near the ask of 234 Facebook options with a strike price of $350 expiring on Oct. 1. The trade represented a $124,020 bullish bet for which the trader paid $5.30 per option contract.
• At 10:20 a.m., a trader executed a call sweep near the ask of 233 Facebook options with a strike price of $340 expiring on Oct. 1. The trade represented a $274,940 bullish bet for which the trader paid $11.80 per option contract.
• At 10:45 a.m., a trader executed a call sweep near the ask of 200 Facebook options with a strike price of $330 expiring on Oct. 15. The trade represented a $440,000 bullish bet for which the trader paid $22 per option contract.

FB Price Action: Facebook is trading around $346.34 at publication time.