Facebook, now called Meta Platforms, dipped hard on the news that a whistle blower is coming out with damning information about the company.
Let’s look at the dip…
I bought a call option for $4186 when FB was trading around 325 per share. I chose a 300 strike price and a 2/18/2022 expiration. I now control 100 shares of FB (currently valued at $34,100) for a little less than $4200. I personally love the call option (if you don’t understand options then do yourself a favor and take my options course).
Here is my thought process…
Facebook has billions in cash and I believe social media is not going anywhere (this doesn’t mean the share price can’t go much lower).
Am I a super big fan of social media????….not at all. Do I care about my financial well-being??..absolutely. Hence I am long FB.
I expect FB stock to get back to the 360s in a few weeks. If it doesn’t then no big deal. I will hold to till expiration and perhaps lose my entire $4186.
If the stock gets to 360s I will sell the option and pocket an incredibly nice gain. Mind you I also own shares of Facebook for the long-term.
If FBs share price dives lower I will most likely buy some shares and buy another options contract (either way I plan on winning in some form or fashion on the FB dip..even if it goes lower).
I will keep you updated on this trade.
It’s up about 23% thus far….
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