Facebook stock reaches record territory near earnings ( Wednesday 4.00PM EST ) . Too High To BUY ? For The Long Investors the answer is NO and for the Short Term Traders the answer is YES . So i suggest short term traders to use options strangle strategy for the next month …
A strangle is an options strategy where the investor holds a position in both a call and put with different strike prices but with the same maturity and underlying asset. This option strategy is profitable only if there are large movements in the price of the underlying asset. This is a good strategy if you think there will be a large price movement in the near future but are unsure of which way that price movement will be.
Read more: Strangle http://www.investopedia.com/terms/s/strangle.asp#ixzz4flMxluBa
So here is our Options Strangle for Facebook inc (NASDAQ:FB) :
FB June 16th 2017 160 Calls 1.45
FB June 16th 2017 140 Puts 1.43
We expect either way to move UP 200% which will leave you with 100% gain overall if you invest the same amound of $ in Calls / Puts