NEW YORK/SAN FRANCISCO (Reuters) - A plunge in Facebook Inc shares rattled the Amazon.com Inc options market on Thursday, with the social network’s fellow FAANG company due to report quarterly results later in the day.
FILE PHOTO: Amazon.com's logo is seen at Amazon Japan's office building in Tokyo, Japan, August 8, 2016. REUTERS/Kim Kyung-Hoon/File Photo
Facebook on Wednesday warned about a margin hit as revenue growth slows and user privacy costs climb, and its 20 percent share drop heightened focus on the online retailer, already a closely watched stock.
Amazon was the second-biggest decliner in the so-called FAANG group of high-flying tech companies, but Facebook’s second-quarter earnings also cast a pall on shares of Apple Inc, Netflix Inc and Google parent Alphabet Inc.
The Nasdaq was down nearly 1 percent at midday, even while the Dow Jones Industrial Average traded up 0.5 percent.
Amazon shares fell nearly 3 percent to $1,811.66, while shares of Netflix, Alphabet and Apple were flat.
“Those investors who were tempted to hold Amazon through earnings saw Facebook and decided to sell,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.
“This is a move to take some risk off the table,” Ablin said.
Weekly options on Amazon implied a 5.5 percent swing in either direction by Friday, up about 1 percentage point from what they implied on Wednesday just before Facebook posted results, according to data from options analytics firm Trade Alert.
“That is opposite to what normally happens,” said Fred Ruffy, analyst at New York-based Trade Alert. “Volatility perceptions have increased after Facebook.”
All things being equal, the
