Options Update: How to Play Facebook

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Feb. 24 (Bloomberg) -- MKM Holdings Strategist Jim Strugger discusses his options play for Facebook on Bloomberg Television's "Market Makers." (Source: Bloomberg)

Option as it closes at a record high.

I'm joined by our derivative strategist.

How much higher good this take us?

We look at volatility, and historically over the last 13 months, we have been suppressed below that level for around 23 days on average.

This persistent elevation in short dated vix futures, that gives a couple of weeks where the market can continue to work higher.

The s&p has moved just about nine percent on average during the eight prior volatility events over the last 13 months.

We targeted at 1900 over the last couple of weeks.

It is back-and-forth in t -- it is back at 14, and before it had a low 12. do you see any indication we could get back to that level?

I think it is, and you want to targeted at 12. the rest of the terms dr.

Is really right where you would expect it to be.

The curiosity is that the short and.

We expect that to online, and with that unwinding the equities would go higher.

Facebook, the bloomberg options monitor is showing a surgical options -- a surge in call options.

What is going on there?

It is bullish across the board.

Facebook came in a little bit, it is now about 3.5% higher than thursday of last week.

Call volume was the highest it has ever been.

With that, you also have skew that is inverted.

Investors are paying more for calls than they are for points.

It is fairly rare.

Really on facebook, it is bullish across the board.

How long do you think that will last?

As far as the interest?

In the calls being more active and more effective than the puts?

It could last until the march expiration of a given the volume of trading we have seen over the last week in facebook calls.

This text has been automatically generated. It may not be 100% accurate.

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