Thank you and Happy New Year! I do think 2015 will be good trading year. I hope 2015 is the best trading year for you yet with many more to come.
How is it going to reach $100 going into earnings? The money that is to be made will be made over the long run and even that is not a guarantee. FB is no longer momo. Why are you watching and trying to come up with trading parameters with a long position. Don't worry about it. Besides you cant trade if you have a bias either long or short.
China is a non-issue in the present and near future. There are many things to be positive about FB but China is not going to happen anytime soon!
The volume on the options gets higher when there is an event like earnings. Because options have high leverage, many people speculate or anticipate price movement. This is usually done around events like earnings. There is sometimes a connection between volume of options and stock. There can also be times where options have a higher than normal volume and the stock has a normal or lower volume.
Most of the time something that would increase option volume would also increase the stock volume but the option volume will be increased by a much larger %.
Option volume will not drive stock volume. Normal stock volumes can occur between events like earnings while the option volume is extremely anemic.
What are you talking about Cashbar? You are agreeing with me in a back handed way.
Please listen without going off on a tangent.
If the volume is low conviction is low. I am not saying FB is bad. I am not saying FB will go down. I am just saying that this is not a big breakout from a pattern with no coils.
What does it mean to err in the course of stating my opinion? Does it mean by taking a course of stating my opinion that I am in err? I am not trying to be sarcastic but trying to understand what you are stating.
I am very objective. Here is my thesis:
1) volume is low
2) FB wont shoot up to 120 just because of what happened Tuesday and Wednesday. I am not saying FB wont go up nor am I saying where FB will go.
I do not know why you want to remain on a board that has nothing but very inane poorly thought posts. You seem to want to discourage any thought other than the stock will move up forever and go to the moon. You discourage people by making remarks that are derogatory and inflammatory. I may disagree with people and I may appear arrogant but with all due respect I don't call people names. It doesn't bug me that people call me names but on the same token it doesn't stop me from stating my opinion or presenting facts.
I don't think anyone knows what will happen in the long term with FB. It appears to me that FB is and will continue to do well. Short term FB could rally into X-mas but on the same token there are no guarantees and the action from Tuesday and Wednesday indicate nothing more than the stock went up.
Peace and i hope you have good Sunday!
A change in volume does not confirm a breakout. Right now the volume is very low.
This is not a discussion on momentum or trading pivots or DT's. This is regarding a break out and big run. The volume in no way confirms a breakout. This Friday was the lowest volume FB has traded since July 3, 2013. There is very weak volume and 32m is extremely weak even though it is higher than the past few days. This is following the volume change of around 9 million shares. Last year at this time the average daily volume was 80m shares.
I want to ask you something. Do you believe that if FB breaks above 80, there will be a breakout and it will run to 100. If it closes above 100 it will run to 120? That is load of bunk to put it very nicely.
I am not saying anything about the run past present or future. I am . just saying that what has happened has occurred on low volume and the change in volume is insignificant and does not confirm a break out.
Conviction through volume is not measured with regression. However if you do and you hit average volume, you are going to end up 0 standard deviations from the mean. That is a three month mean with an average of 36 million. The two days have a volume of 32m and change.
This period is low volume to and anemic trading. A change in volume to 32m is nothing when average volumes were recently 50 million shares trading daily and there were big volume days of 100m to 200m shares.
Once overhead is lifted will volume go up? That means ........................................ Less shares trading =higher volume
Breakouts are not breaking through barriers. A Breakout is when a stock breaks out from a pattern which holds the stock. A stock trading above a resistance does nothing but indicate that the stock is above a resistance and in no way indicates it will rise. Volume is average and does not confirm a breakout. .......look for around 60 to 80 million volume for a confirmation. Even though volume went up from the past week or so, it is far away from volumes this summer which were relatively large by comparison.
Technically speaking there is really nothing happening but that is not to say that the stock will not rise. Remember that resistances as well as supports are just barriers. If a stock climbs above the resistance it could follow the trend, capitulate or consolidate in a new pattern.
And Alice's Restaurant :)) I think I have heard it too many times and I don't know what it has to do with Thanksgiving. Anyway, you have a Happy Thanksgiving as well.
You don't value a stock by its pps. It will join high flyers like GOOG at 100 and change and at several hundred dollars FB will be two to three times GOOG and AAPL.
I am just saying this because stock price and company value are two different things.
If you want to short Linkedin, I would check the fundamentals and chart of LNKD which has been doing well lately.
At work is a collaboration platform and Linkedin is a recruiting platform. The immediate affect will most likely be small.
If you feel that you can hold a short for years and wait and see if the stock drops then go ahead. If you want to short based on FB news, I would say that could be a recipe for disaster. Do your DD and look at LNKD and decide if you will short based on LNKD instead of what FB is doing. I have no position in LNKD but I do trade based on the company that I hold positions not based on what another company does (The other company may have an affect but that has to be taken together with the fundamentals of the company you are trading)
If you believe FB will do well because of At Work, then invest in FB.
jjj, do you have any idea how options are valued? This is an honest question and I am not trying to be sarcastic.
Just because the stock goes up does not mean the option contract goes up.
For the contract:
Delta is .0382 (this is the instantaneous value change of the contract for every dollar change in the stock), This will go higher as the stock goes higher but with a very low gamma you can assume this wont change unless the stock goes up substantially.
Theta is -.0027 This contract loses a 1/3 of a cent for every day that goes by. This is nearly linear based on the price of the stock divided by the number of trading days until expiration. Theta will increase as the contract increases therefore the decay of this option will decay faster as there is more value in the option. Lets make it easier....
Try an equation
divide it by 13 months which equal $5.86 multiply by 3 =$17.60
So for this contract to have any value the stock has to gain $17.60 every quarter.
If you want the true value of a far otm option, it will be what people will pay for the contract. If FB is $100 by July, this contract will be zero. The reason why is that it will need to increase its value by $50 in 6. Short time big move=big gamble.
If you believe that the stock will be $130 in July (which is extremely unlikely), then you could buy a $120 strike option for $1.20 instead of $.36. At this stock price this option would be worth around $20 and the 150 call would be worth about $2.00. It may be 3.5 times as expensive to initiate but in this scenario of $130 the 120 strike would be worth 10 times more valuable than the 150 strike.
Far otm option plays are nothing but big gambles. In reality as I showed you, your money is even better leveraged at lower strikes. I am not saying FB wont move upward but I am saying that buying a 150 strike call is not smart and has a high likelihood of being a losing play even if the stock moves in favorable direction.
If I wanted to lean to gamble I probably would not go to the guy playing the nickle slots.
The far OTM nickle options wilth the spread and commish will double your cost basis. These options have a delta of 0 for all practical purposes. If FB ends 2016 at $140, your bet is worth zero, zilch, nada.
Ill bet none of your publications say $150. Take a look at the current beta (or the incredible beta a of year ago) and neither gets you anywhere near $150.00.
By the way a little math 85% to 100% upside does not get you to $150. Also these firms are collectively saying less than $90 and a few are at or around $100. Neither one of those aforementioned are $150 or 85% upside or 100% upside.
I think you meant to say..........Watch and learn from my mistakes. Gamble alone bud!
PE is not a good indicator for growth stocks.
However in calculation, the PE is trailing 1 year and uses GAAP numbers. 1.70 and 2.00 are non-GAAP and have nothing to do with the calculation of PE.
Non-GAAP is used to calculate earnings which don't include one time events, stock and option awards, and certain other events. The numbers you see for year end and forward estimates are non-GAAP estimates therefore they have nothing to do with the calculation of PE.