Thursday, May 31, 2012

$FB - are you picking at bottom? then add this...

if you are picking a bottom here or using the thesis that you will buy today for the "long term"... with stock at 27 today, look at adding this for double upside:

Buy a July 28/31 call ratio spread... (buy one 28, sell two 31's per 100shares) ..can put this on for zero right now, ie "free trade")

This ratio spread profits from 28-34 at july opex with max gain at a 31 pin. so at 34 the ratio is zero but your stock has gained from todays 27 to that 34. no added buying power is needed for this ratio spread. again, put this on if you have a bullish thesis going to at least july opex, you can also put this on if you have a paper loss from the IPO..you put this on for free and if it rebounds you can start chopping away at the cost basis of your shares.


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