Thursday, May 24, 2012

Make Money Trading Facebook

Facebook Connected with Wall $treet
Will Stock Holders Make Any Money with It?
There has been a lot of talk about how to make money trading Facebook, and now that the IPO has finally been issued (with much fanfare and poor execution) the rest of us traders have our shot at a piece of the action. Like many technology enthusiasts around the world, traders have long wanted to get in on the Facebook phenomena. In some ways that may have cursed the stock for the time being.

Ways to Make Money Trading Facebook


Any long term investor will tell you that there are a number of ways to profitably trade a stock, and Facebook will be no different in that regard. Where the principal problem remains however is that enthusiasts for the technology will have to divert themselves away from that emotional attachment and stick to emotionless trading. In order to make money trading Facebook it is a given that you will have to be willing to either wait a long time for the stock to become a value or be willing to take short positions against it. In my humble opinion the only thing keeping the stock afloat at this point is the lack of standard CBOE options contracts to trade against it.

Again - for my money it is the limited number of ways to take positions against the likelihood of a stock rise that is keeping the Facebook share prices afloat. I think once we see options contracts open on Facebook shares the long decline to true value will manifest itself.

Where to Trade Facebook Options Today


Although as of this writing standard options contracts on Facebook shares are not yet available that has not stopped traders who wish to make money trading Facebook options. There is presently one binary options broker with Facebook binary options contracts available for trading. This style of contract allows traders to get short against Facebook shares in a way which limits losses to the amount of capital investment (unlike shorting a stock or writing call options). Oddly enough the broker reports that the new Facebook binary options contracts have been very popular. Or maybe it's not so odd given how many people are trying to make money trading Facebook down to its true (lower) value.