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The bulls target $200 for Facebook shares

Facebook is on a tear this year — surging 42 percent, and helping to push the tech sector to highs not seen since the dot-com bubble.

After 17 years, the S&P 500 Technology sector finally closed at a record high on Wednesday, powered by mega-cap tech stocks like Facebook, Apple, Microsoft and Nvidia. And with big tech earnings kicking into high gear, traders are doubling down on Facebook.

The social giant reports earnings after the market close on July 26, and according to Mike Khouw of Optimize Advisors, the options market is implying a move of about 4.5 percent in either direction, which is less than the long-term historical average.

"We've seen quite a lot of call activity going on in Facebook [on Tuesday]. More than double the average call volume [on Wednesday]," Khouw said Wednesday on CNBC's "Fast Money." "In fact, it was the most active single stock option. 50 percent more volume than the second-place name, which would be Apple."

Traders are piling into the tech giant ahead of its earnings report. The most notable trades were the purchases of the Sep 175/200 and Sep 180/200 call spreads. These are bullish bets that Facebook will close at or above $200 by September expiration — about 22 percent higher from Thursday's trading price.

These traders are "betting on a pretty strong upward move. These are some longer-term bullish bets," Khouw explained.

Analysts polled by FactSet are expecting Facebook to post earnings of $1.12 per share on $9.2 billion in revenue.

Shares of Facebook were trading at the $164.20 range midafternoon Thursday.

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