Meta, formerly known as Facebook
99 TL, 06 E350
Joined: Sep 2006
Posts: 5,030
Likes: 164
From: Toronto
Most of you already know this. Most of the blame would have to go to the Lamestream media for hyping this.
http://www.theglobeandmail.com/globe...rticle2446451/
http://www.theglobeandmail.com/globe...rticle2446451/
Facebook's stock falls below $30
Facebook Inc.'s (FB-Q29.36-2.55-7.99%) stock has fallen below $30 (U.S) for the first time. That's down 20 per cent since its much-awaited public stock debut this month.
Facebook began trading publicly on May 18 following one of the most anticipated stock offerings in history. The initial public offering of stock priced at $38 a day earlier.
But the launch from far from smooth. The stock's public debut was marred by technical glitches at the Nasdaq Stock Market that delayed trading. And the company, along with the investment banks that led the IPO, is the subject of shareholder lawsuits. Facebook says the lawsuits are without merit.
Facebook Inc.'s (FB-Q29.36-2.55-7.99%) stock has fallen below $30 (U.S) for the first time. That's down 20 per cent since its much-awaited public stock debut this month.
Facebook began trading publicly on May 18 following one of the most anticipated stock offerings in history. The initial public offering of stock priced at $38 a day earlier.
But the launch from far from smooth. The stock's public debut was marred by technical glitches at the Nasdaq Stock Market that delayed trading. And the company, along with the investment banks that led the IPO, is the subject of shareholder lawsuits. Facebook says the lawsuits are without merit.
yet 
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Moderator
Joined: Oct 2004
Posts: 64,099
Likes: 3,347
From: Not Las Vegas (SF Bay Area)
well i initially put in a limit order on the friday it came out for $38/share. hoping that i would get the stock in an intraday drop. and then sell it when it went back up.
that would have worked. but i didnt get my trade confirmation until 1:15pm PST. 15minutes after the market closed.
and i tried to cancel my limit order too when i saw it hit $38/share and that my order wasnt filled. but that didnt go thru.
that would have worked. but i didnt get my trade confirmation until 1:15pm PST. 15minutes after the market closed.
and i tried to cancel my limit order too when i saw it hit $38/share and that my order wasnt filled. but that didnt go thru.
_
Joined: Nov 2006
Posts: 19,277
Likes: 3,424
I tried warning you...
https://acurazine.com/forums/showpos...&postcount=130 :
+1
Even @ the $38 IPO price, I think it's still too much.
From page 1:
I'll wait a couple of weeks or so and see what happens. If it pulls back to about $25-$28, I might consider it. But not where it is now.
Interesting how when it pulled back to $38 twice, it never went below it.
I expect it to end the week at $25.
You'd be better off buying puts because this stock is going to tank some more.
https://acurazine.com/forums/showpos...&postcount=130 :
Even @ the $38 IPO price, I think it's still too much.
From page 1:
Without that share price information, Facebook's valuation is still speculative.
Facebook has its own guesses, though. The company said it conducted its own valuation of its stock at the end of each quarter, and as of December 31 determined it to be worth $29.73 a share.
Facebook has its own guesses, though. The company said it conducted its own valuation of its stock at the end of each quarter, and as of December 31 determined it to be worth $29.73 a share.
Interesting how when it pulled back to $38 twice, it never went below it.
You'd be better off buying puts because this stock is going to tank some more.
Last edited by AZuser; May 31, 2012 at 12:55 AM.
Moderator
Joined: Oct 2004
Posts: 64,099
Likes: 3,347
From: Not Las Vegas (SF Bay Area)
I tried warning you...
https://acurazine.com/forums/showpos...&postcount=130 :
I expect it to end the week at $25.
You'd be better off buying puts because this stock is going to tank some more.
https://acurazine.com/forums/showpos...&postcount=130 :
I expect it to end the week at $25.
You'd be better off buying puts because this stock is going to tank some more.
_
Joined: Nov 2006
Posts: 19,277
Likes: 3,424
Buying puts is like shorting a stock but with a slight difference.
When you short a stock, you borrow X number of shares of a stock from a broker to sell. You are then hoping the stock price drops so you can buy back those X number of shares at a lower price to repay the broker. Therefore, your profit is the difference between your sell price and buy back price. But if the stock goes up, you're screwed.... your loss can be infinite.
With a put, you're buying a contract that gives you the right (but not obligation) to sell x number of shares of a stock at a certain price (strike price) before the contract expires. Contracts expire on the 3rd Friday of the month. This contract will cost you $x.xx X 100 shares (contracts are usually for 100 shares of stock).
Using FB as an example, let's say you bought a June put contract for 100 shares of FB for $1. Your cost for the contract is therefore $1 x 100 FB shares = $100.
Say your put strike price is $26. Say the current price is $28. Say the stock price drops to $20 before your June put expires on June 15 and you want to exercise the put option. You now have the right to sell those 100 shares at $26. You can exercise the put option by buying 100 shares of FB for $20 x 100 = $2000 and then selling them at $26 x 100 = 2600
Your profit would be $2600 (your selling price) - $2000 (your buying price) - $100 (contract price) = $500
Or you could sell that contract for whatever it's worth.
What if FB keeps going up between the day you purchased the June put and the June 15 expiration and it's currently at $32? Since it's a contract that gives you the right but not obligation, you're not obligated to do anything. You could just let the option expire. If you do this, you'd just be out the $100 you paid for the contract instead of the infinite amount if you short a stock and the stock goes up.
When you short a stock, you borrow X number of shares of a stock from a broker to sell. You are then hoping the stock price drops so you can buy back those X number of shares at a lower price to repay the broker. Therefore, your profit is the difference between your sell price and buy back price. But if the stock goes up, you're screwed.... your loss can be infinite.
With a put, you're buying a contract that gives you the right (but not obligation) to sell x number of shares of a stock at a certain price (strike price) before the contract expires. Contracts expire on the 3rd Friday of the month. This contract will cost you $x.xx X 100 shares (contracts are usually for 100 shares of stock).
Using FB as an example, let's say you bought a June put contract for 100 shares of FB for $1. Your cost for the contract is therefore $1 x 100 FB shares = $100.
Say your put strike price is $26. Say the current price is $28. Say the stock price drops to $20 before your June put expires on June 15 and you want to exercise the put option. You now have the right to sell those 100 shares at $26. You can exercise the put option by buying 100 shares of FB for $20 x 100 = $2000 and then selling them at $26 x 100 = 2600
Your profit would be $2600 (your selling price) - $2000 (your buying price) - $100 (contract price) = $500
Or you could sell that contract for whatever it's worth.
What if FB keeps going up between the day you purchased the June put and the June 15 expiration and it's currently at $32? Since it's a contract that gives you the right but not obligation, you're not obligated to do anything. You could just let the option expire. If you do this, you'd just be out the $100 you paid for the contract instead of the infinite amount if you short a stock and the stock goes up.
Old Man Yelling at Clouds
Joined: Apr 2007
Posts: 16,973
Likes: 7,362
From: Seattle, WA
^ Great post. So when you short a stock, lets say you borrow 100 shares of something and sell it for $50 per, so you get $5000. Now you owe that broker 100 shares, so if it drops to say $40 per share, you can buy 100 back for $4000, and you net $1000. Is that how it works?
AZ Community Team
Joined: Nov 2004
Posts: 19,090
Likes: 4,757
From: Maryland
Great writeup, puts are a very nice investment strategy on risky stocks.I once met a guy who's sailboat was named "Puts and Calls", which is how he bought the nice boat (~40').
Buying puts is like shorting a stock but with a slight difference.
When you short a stock, you borrow X number of shares of a stock from a broker to sell. You are then hoping the stock price drops so you can buy back those X number of shares at a lower price to repay the broker. Therefore, your profit is the difference between your sell price and buy back price. But if the stock goes up, you're screwed.... your loss can be infinite.
With a put, you're buying a contract that gives you the right (but not obligation) to sell x number of shares of a stock at a certain price (strike price) before the contract expires. Contracts expire on the 3rd Friday of the month. This contract will cost you $x.xx X 100 shares (contracts are usually for 100 shares of stock).
Using FB as an example, let's say you bought a June put contract for 100 shares of FB for $1. Your cost for the contract is therefore $1 x 100 FB shares = $100.
Say your put strike price is $26. Say the current price is $28. Say the stock price drops to $20 before your June put expires on June 15 and you want to exercise the put option. You now have the right to sell those 100 shares at $26. You can exercise the put option by buying 100 shares of FB for $20 x 100 = $2000 and then selling them at $26 x 100 = 2600
Your profit would be $2600 (your selling price) - $2000 (your buying price) - $100 (contract price) = $500
Or you could sell that contract for whatever it's worth.
What if FB keeps going up between the day you purchased the June put and the June 15 expiration and it's currently at $32? Since it's a contract that gives you the right but not obligation, you're not obligated to do anything. You could just let the option expire. If you do this, you'd just be out the $100 you paid for the contract instead of the infinite amount if you short a stock and the stock goes up.
When you short a stock, you borrow X number of shares of a stock from a broker to sell. You are then hoping the stock price drops so you can buy back those X number of shares at a lower price to repay the broker. Therefore, your profit is the difference between your sell price and buy back price. But if the stock goes up, you're screwed.... your loss can be infinite.
With a put, you're buying a contract that gives you the right (but not obligation) to sell x number of shares of a stock at a certain price (strike price) before the contract expires. Contracts expire on the 3rd Friday of the month. This contract will cost you $x.xx X 100 shares (contracts are usually for 100 shares of stock).
Using FB as an example, let's say you bought a June put contract for 100 shares of FB for $1. Your cost for the contract is therefore $1 x 100 FB shares = $100.
Say your put strike price is $26. Say the current price is $28. Say the stock price drops to $20 before your June put expires on June 15 and you want to exercise the put option. You now have the right to sell those 100 shares at $26. You can exercise the put option by buying 100 shares of FB for $20 x 100 = $2000 and then selling them at $26 x 100 = 2600
Your profit would be $2600 (your selling price) - $2000 (your buying price) - $100 (contract price) = $500
Or you could sell that contract for whatever it's worth.
What if FB keeps going up between the day you purchased the June put and the June 15 expiration and it's currently at $32? Since it's a contract that gives you the right but not obligation, you're not obligated to do anything. You could just let the option expire. If you do this, you'd just be out the $100 you paid for the contract instead of the infinite amount if you short a stock and the stock goes up.
Last edited by Legend2TL; May 31, 2012 at 10:06 AM.
_
Joined: Nov 2006
Posts: 19,277
Likes: 3,424
Here's a screen shot of a $25 FB put for you, Miz.
Current price for the FB put contract is $0.70 @ 100 shares, or $70
yObyV.jpg
Your break even price is $25 - $0.70 = $24.30 - your brokerage commission. If FB drops below [$24.30 - your brokerage commission] between now and June 15 (current price is $26.90), anything below that is profit. If it doesn't, you're just out the $70 for the contract.
If you got the contract at the open price of $0.45 (or $0.45 x 100 = $45), then your break even point would have been $25 - $0.45 = $24.55 - commission
Now the question is, will FB drop below that price between now and June 15? It's starting to look that way...
Current price for the FB put contract is $0.70 @ 100 shares, or $70
yObyV.jpg
Your break even price is $25 - $0.70 = $24.30 - your brokerage commission. If FB drops below [$24.30 - your brokerage commission] between now and June 15 (current price is $26.90), anything below that is profit. If it doesn't, you're just out the $70 for the contract.
If you got the contract at the open price of $0.45 (or $0.45 x 100 = $45), then your break even point would have been $25 - $0.45 = $24.55 - commission
Now the question is, will FB drop below that price between now and June 15? It's starting to look that way...
Last edited by AZuser; May 31, 2012 at 10:31 AM.
Drifting
Joined: Oct 2009
Posts: 2,761
Likes: 86
From: Boston Metro
I picked up the aug 20 puts on monday - already looking good.
I see they opened up weeklys as well. Picked up june weekly 25 put. It's a gamble but if it drops 5% in the next couple days i'll double my money.
I see they opened up weeklys as well. Picked up june weekly 25 put. It's a gamble but if it drops 5% in the next couple days i'll double my money.
Карты убийцы
Joined: Apr 2003
Posts: 8,264
Likes: 125
From: Cochabamba, Bolivia
With the mega computers trading on fractions of a penny at a zillion times a second, the average Joe trader does not have a fair trading field.
Also for shorts, they should bring back the up-tick rule.
Also for shorts, they should bring back the up-tick rule.
$29.60 : +$1.41 (5.00%)