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Trader shows support for Facebook

Chris McKhann (chris.mckhann@optionmonster.com)

Facebook is down near a key support level this morning, but one trader is giving the stock a vote of confidence.

optionMONSTER systems show that the trade is in short-term options that expire at the end of next week. A trader sold 5,000 Weekly 26 puts for their bid price of $0.71 and bought 5,000 Weekly 24 puts for the ask price of $0.10. The volume was well above the previous open interest in each strike, indicating new activity.

This credit spread is a bet that FB will be above $26 at the end of next week. The credit of $0.61 means that the trade could profit with the stock anywhere above $25.39. (See our Education section)

FB is up fractionally this morning to $25.79. The social-media company was trading at $29 at the start of the month but is now back near long-term support at the $25 level.

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