FB is not too bad for a tech stock at $278, which is $795Bn. They made $30Bn last year and project $40Bn in 2022 and to some extent, of course, the pandemic is making them look better with everyone stuck at home but FB does a lot of stuff (that makes regulators nervous) that I think paints a path to a bright future.
With options, we don't have to regret not buying them for $200, we can still buy them in the LTP for $200 by selling 3 2023 $230 puts for $28.50 ($8,550) and that puts nice money in our pocket and I want to buy 5 2023 $260 ($65)/300 ($47) bull call spreads at $18 ($8,000) and sell 2 June $310 calls for $9 ($1,800) so the whole thing is a net $2,350 credit on the $20,000 spread and our worst case is owning 300 shares at net $225.30 ($67,590), which is a 20% discount to the current price.
Ideally, we'll sell more short calls during the 674 days we have to play and we can't really get burned to the upside as we're perfectly happy to buy more longs if FB moves higher since that would also mean we could put stops on the profitable puts and we'd be using only a small fraction of an allocation block to maintain a FB move over $300.
Margin on the puts is just $4,132 so it's an efficient trade but, of course, that would go higher if FB goes lower - keep that in mind.
It will, on the whole be disappointing if all we make on this trade is $22,350.
