Facebook traders are the most bullish in a year heading into earnings

Fresh off a new record high, Facebook ‘s stock is showing no signs of slowing as traders forego protection ahead of the company’s second quarter earnings, due Wednesday after the close.

Options traders are paying the lowest premium in more than a year to guard against a decline in Facebook’s stock, relative to bets on a gain, according to data compiled by Bloomberg.

In other words, they’re feeling quite bullish, and not particularly inclined to hedge.

What’s more, short interest – a measure of bets that share prices will drop – also hit its lowest level in more than a year last week, falling to just 0.69% of shares outstanding, IHS Markit data show.

The complete lack of shorting activity is a surprising reaction to a stock that’s done as well as Facebook, which has surged 41% year-to-date, more than four times the benchmark S&P 500 .


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