The stock (or soon to be stock) in the news for the last two weeks is Facebook. The pricing on the Facebook IPO should be announced after the close today, Thursday May 17th. The symbol is expected to be FB.
The Options Institute has received more than a few phone calls and e-mails about Facebook options, and when they’ll be listed. Let’s make a few assumptions and come up with an educated guess as to when Facebook options will be available to trade.
If the Facebook IPO is successful and trading on the shares begins tomorrow, Friday the 18th, the first trading day for Facebook options will be Tuesday the 29th (the 28th would actually be the first day the options would be eligible, but that’s Memorial Day).
I have not seen any contracts specs yet, as we usually release info as to which Options Cycle (June-Sep, July-Oct or Aug-Nov), the DPM, strike prices, would Weekly’s or LEAPS be available, etc. after the IPO but a few days before the option listing.
Qualifiers in our rules that dictate when we can list any new option:
• Minimum of 7,000,000 shares of the underlying security which are owned by persons other than those required to report their stock holdings under Section 16(a) of the Securities Exchange Act of 1934.
• Minimum of 2,000 stockholders
• Trading volume has been at least 2,400,000 shares in the preceding 12 months (FYI, the security does not have to be trading for 12 months; if they hit that volume level in a day, or two or three, etc., that would qualify).
• Market price per share has been at least $3.00 for the previous 5 consecutive business days preceding the date on which the Exchange submits a certificate to the Options Clearing Corporation for listing and trading.
I don’t think Facebook will have any problem meeting the requirements for listing. If all goes as planned, We’ll blog more about Facebook options next week.