Snapchat is all about sharing who you are in the moment. The Los Angeles based “camera company” (SNAP) went public today at $17 and is now trading around $25 confirming investors like to smile for the camera. 

IPO’s can generate as much excitement as a Hollywood movie premier but can sometimes disappoint too. So far today SNAP has proved to be much more than an Adam Sandler movie but over time every stock has a story to tell and SNAP will too.

If you have been standing on the sidelines today with an appetite for shares but find them too expensive then a call option may provide you a means of getting in the game with less risk. The purchase of a call option or shares of stock has unlimited profit potential. The most you can lose with a call is the premium paid. Yet the purchase of stock may incur substantial losses on the downside. 

In case you have been wondering what determines whether a stock can have listed options, here is the qualifying criteria:

  • A minimum of 7,000,000 shares 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
  • A minimum of 2,000 stockholders
  • Total trading volume of at least 2,400,000 shares reached at any time in the last 12 months
  • The market price per share has been at least $3 for the previous 5 consecutive business days preceding the date on which the CBOE issues a certificate to the Options Clearing Corporation (OCC) for trading.

So flash another smile for the camera! SNAP options will begin trading here at CBOE next Friday. There will be Calls and Puts with various strikes and expirations to choose from.  Having a forecast on SNAP with close attention to time and volatility may allow you to take advantage of the different daily, weekly or monthly outcomes. Now that’s something to smile about.

@PeterLusk
SnapIPO