It took just 10 minutes for Facebook (FB) options to trade 170,000 contracts as its share price leapt to a post-earnings record high at $78.44. That means the shares would now need to rise by 27% to reach triple-digits, which is far more doable than the 82% leap of faith that was required at the end of 2013 (FB shars were at $54.80 on 12/31/13). And so we thought it would be interesting to crunch the odds of reaching $100 per share using available option expirations. According to current option pricing, investors see a 1.5% chance of jumping that far by September 19. The odds of doing so one month later are just 3.6%, while by December 19 they jump to 9.2%. Option traders currently assign a 10.3% chance of closing above $100 in time for options settlement January 16, 2015, six months from now. However, the odds improve substantially to 21.7% – or roughly one-in-five – by January 2016.
Chart – Probability of landing above $100 by January 2016
(click to enlarge)