Facebook is losing friends ahead of earnings, at least in the options pits.
On Tuesday, when Facebook's stock was at $76 per share, one trader bought 1,500 February 69-strike puts for 93 cents. Since buying a put gives you the right to sell a stock for a set price at a given time, the trade is profitable if Facebook drops below $68.07, or around 10 percent lower, at February expiration.
"When you think about what's going on [in the market] when stocks like Microsoft are declining 10 percent after earnings, maybe some traders are reaching for way out-of-the-money protection in case of a disaster," RiskReversal.com's Dan Nathan said Tuesday on "Fast Money."
Tech earnings have been a mixed bag. While investors cheered results from Apple and Yahoo, they took shares of Microsoft to the woodshed despite results that were in line with expectations. Microsoft's sharp post-earnings selloff could have some Facebook investors looking for protection against a downside surprise.