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Another option for Facebook trading

May 18, 2012|By Chad Terhune
  • Facebook Inc. opened trading on the Nasdaq Stock Exchange Friday.
Facebook Inc. opened trading on the Nasdaq Stock Exchange Friday. (Carolyn Cole / Los Angeles…)

Investors who missed out on Facebook’s initial shares have another option, literally.

The Chicago Board Options Exchange will start listing option contracts on the social-media giant May 29, according to specialist firm Susquehanna Investment Group. The company’s options are expected to be among the most heavily traded and volatile in the market.

This approach allows investors who missed out on the initial trading to pick and choose prices in the options market.

An option that gives the investor the right to buy the stock at a specific price is termed a call. In contrast, the option to sell the stock at a specific price is called a put.

There are risks involved in options trading. Most online brokerages handle options trading and they can offer retail investors tips on how to navigate a complex market. There’s more information at the options exchange's website.

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