Facebook is taking a hit as Washington signals that increased oversight on big tech companies might be coming.
On Monday shares of the social media giant slid more than 7.5% — erasing $38 billion in value — after the Wall Street Journal first reported that the Federal Trade Commission was looking into Facebook's antitrust policy.
Facebook is now trading in a bear market, with shares about 20% below their July 2018 all-time intraday high of $218.62.
But options traders are betting that the stock may turn a corner — and soon.
By Friday mid-day investors had bought more than 6,000 Facebook calls at the June 180 strike price, according to Investitute co-founder Jon Najarian. Later in the day, that number soared to nearly 30,000.
These calls expire next Friday, so traders are betting the stock moves above $180 by then. Facebook was trading around $173 on Friday, so a 4% pop would lift it to $180.
Najarian said Friday on CNBC's "Halftime Report" that he jumped on this trade and bought calls, since he believes the stock "is going to push towards, or through, $180 next week."
- CNBC's Lauren Feiner contributed reporting.
Disclosure: Jon Najarian owns Facebook calls.