WALLSTREET ARCHIVE

Facebook gets two large consecutive green days. We trade the calls both days

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Facebook (NASDAQ:FB) stock is flying high again. After a disastrous 2018 in which this social media giant lost more than 40% of its market capitalization, its shares are the second-best performer in the group of the top five U.S. tech firms known as FAANG this year. It is 29% up in 2019, climbing from $131.09 on Dec. 31 to $169.13 at Thursday’s close.

The stock’s biggest bears are probably scratching their heads and trying to understand what’s behind this powerful rally. On the surface, nothing has changed for Facebook, which operates the world’s largest social communities and messaging services, including Instagram and WhatsApp. It’s Standard case of canceling the noise and trading the action. We traded the weekly calls twice over this week profiting over 250% collectively in two days.

It’s becoming increasingly clear that advertisers have no other method of reaching their audiences that’s as powerful as Facebook is. That means the worst-case scenario that the market had priced into Facebook stock last year was wrong, and the shares’ recent rally is reflecting that reality.