Here’s the aftermath of my Facebook ($FB) analysis. (October 05, 2021)


Download Video || Download Fast Video

Yesterday I looked at Facebook ( NASDAQ: FB ) and I said that while a lot of people wrongly wanted to short the stock. My sense was, the stock wasn’t going to go straight down, it may continue to go down, I don’t know. But it wasn’t going to continue to go straight down so we will probably see some more oscillations and I would actually buy it.

Well, look at today, we’re up 2 percent. Did I buy it? Not really, but I did it another way. We put on a bull put spread over at Option Market Mentor. And what I did was, I set this bull put spread out. And so as long as the stock stays above 320.00, which is where I put it, as long as the stock stays above 320.00, until the third Friday in November, we’re all good. That’s what I am looking at. So basically right here, as long as the stock stays out of this box this is going to be 100 “percenter”.

However, I am not really looking for 100 percent. What I want is just half of the credit that I collected. And if I recall correctly, and I do, I got $5.00 for that. It was a little bit wider spread than I had envisioned than I had thought, but I wanted the dough. So in this case, as long as the stock can stay above this level until here, I’m a winner, completely. If I decide to sell earlier I will and I am still a winner.

So this is how I would calculate this out, I want 50 percent profit from what I got. And so here, we’ve got 33 bars, 33 trading days, it’s actually like 45 days. And so what I would intend to do is, let me cut this in half to about right here, so 17 bars. What’s our date here? The date is October 28th. So come October 28th, as long as the stock is still up here, October 28th, my anticipation is that I will have half of that credit. And so the idea is, I am not holding this stock for 33 trading days. I am only holding it for a couple of weeks, about 3 weeks or so, and it makes a difference.

I just wanted to mention this as a follow-up to what I said yesterday. Most people know, I don’t like Facebook ( NASDAQ: FB ). I think Zuckerberg is a scumbag, and he’s always been. And I think Sandberg is a phony, and she’s always been that. So I don’t like the people at the top, but the good news for them and for me is that they don’t know each other. And I would say that the distance makes us better. You shouldn’t care about that, I am just editorializing because it’s my video and I can do that.

I think Facebook ( NASDAQ: FB ) is extremely corrosive. However, this big sell-off, and I guess there is a whistleblower, but then there is also some other indications that she may be kind of, shall we say, a wolf in sheep’s clothing or a sheep in wolf’s clothing, that maybe she is not completely on the up and up. But I will say this, Facebook ( NASDAQ: FB ), it’s kind of like a cockroach, even in a nuclear holocaust, the cockroach will survive.

This company is going to do just fine but this is what I see the catalyst being at some point; Zuckerberg has said for years, he wants more regulation. It’s like, oh my gosh, I have so much power, this is horrible. We can’t police everybody (we secretly only want to police half of the story because we agree with the other side of the story). But all of that notwithstanding, Zuckerberg says, golly gee, we need to be controlled. We need to be regulated. Please Congress, help us, help us.

And so most people say, oh my gosh, that is just awesome. Look at him wanting to be regulated, asking to be regulated. No, when they regulate Facebook ( NASDAQ: FB ) they don’t regulate Facebook ( NASDAQ: FB ), they regulate the space. And they make it such that competitors are not able to be competitive because of the excess regulations.

On the other hand, Facebook ( NASDAQ: FB ), being this massive behemoth they can handle these regulations very easily for 2 reasons. First of all, because they have all the money in the world. Second of all, because they helped write the regulations. And you watch, if that happens, you will hear that.

The bottom line is, even though Facebook ( NASDAQ: FB ) is broken, I would still look at this as a trade to the upside, as a swing trade. Not as a big investment here, simply because the stock really needs to gather itself. It needs to trade sideways for a bit, as it did here before it is just going to run off to the races. But what I am saying is, don’t shy away and say Facebook ( NASDAQ: FB ) is dead. It’s not, if only. Shall we just say, it’s resting?

Anyway, that is all I have for you, bull put spreads work, swing trades work. Other than that, not so much, and shorts definitely do not work.

Free Chart

Leave a Comment