Exactly. Whatever you do, DON'T sell condors or sell premium of any kind. Another possibility is that FB shoots to 40, taking out the weak short sellers....and THEN IT FADES INTO OBLIVION (high teens). So a calendar spread would be in order....long short term, short long term options.
i haven't had much success with calenders.. maybe i'm not spacing the months out correctly and not selling enough volatility compared to what i'm buying .. that strategy is so threading the needle
You sure you're not just picking the move incorrectly ? I mean the above strat is just disasterous if FB tanks on the announcement.
I had a negative sentiment on FB but now I believe based on all the info that I have got (from chart, news,...) FB is in no short zone. I believe those who short at this level $27.60 range might suffer as FB might climb back to $30 range again. I don't see anything that rosey for FB but shorting it at this level is not a wise decision. The best advice is maybe "AVOID". The same theory is true for GRPN.
i'm not in a FB trade... i was looking at getting into one for a longer term.. and i was just generally saying i haven't had much luck with calenders.. i'm going to keep trying them though!
The bear trade is very crowded as evident in today's reversal. FB was ready to test the day's low but the bears were over extended so they got toasted. But there's no love for tech or social media stocks right now = no serious buyers and frequent bear raids. FB will continues to be volatile until earnings. Price action is only good for day trade and nothing else. Valuation continues to be an issue and I'm counting on a discount after earning report and the end of the first lock up period. I'm looking to buy the dip on the drop especially on big market down day for some swing trading. At some point FB will choose to have PE like AMZ and LNKD or AAPL. If it's the latter than the stock should only worth in single digit.
yeah.. well i still think its got some downside.. the price to earnings is going to increase because they will make money but not at the rate at which people expect.. its going to take Zucker a min to figure out how to leverage all of our personal information into dollars.. right now its all just a inflated number based upon unreal expectational.. i'm gonna start looking for a low risk downside trade.
I'm thinking based on other posts about FB that banks might stop support the price soon enough. How can they handle all the possible lock up shares, billions, that will be flooding the market in the months to come? FB will be competing for dollars with many, still growing, much lower priced stocks like AAPL or GOOG? You can't really treat it like AMZ because it doesn't have a physical business model with income from sales + auction fees and not to mention cloud computing etc... Based on the market reactions, the hype effect is wearing off pretty fast at this moment. Joe public will continue to dribble money into FB at various price levels so there's no quick crash after the initial shocks (IPO, earnings, dilution, etc). Unlike other stocks, there's a dedicated crowd, even professionals, that are defending FB even beyond their pocket book. It's almost feel like a cult worshiping their idol so it will be interesting to see when they realize their messiah cannot take them to the promise land of $40+. Oh well, dreams will be broken but Wall Streets will go on. Next please. Since the expectations have dropped quite a bit this early prior to earnings (to my surprise and dismay ). FB could be gapping up if the stock just manage to beat estimates by a fair amount of 20/30% and pretty much a non event if inline or it could plummet some more if earnings are disappointing. But the rally, if there's one, will be short lived as it will be sailing into a maelstrom of massive share dilution @ 90 & 180 day plus much more at the year mark. FB even with low earnings can still scrape out decent income due to low operating costs and companies giving the ads a try. But as soon as the companies found out that the ads doesn't translate to $ (as very few clicked on them and let face it the FB crowd doesn't use FB to buy/research on products, there's eBay, Amazon, retail, + other venues and medias), than it's good bye and good night for many of them but this can take a year or two to play out.
Totally agree!, the only thing that could possibility happen is the syndicate doesn't dump but pushes higher creating a public "i missed the move" feeling and the public joining to continue the stock higher. but not everyone in the syndicate inside can be controlled not to sell most likely