If you weren’t in a cave overnight, you likely heard of the colossal miss reported by Facebook on second quarter earnings and guidance. Let’s skip all the analyst speak (you’re welcome) and head to something useful. How do we make money on this?

This is where I would argue you have to take advantage of options. This will allow you to rigidly define risk from the outset, while giving yourself an opportunity to profit no matter how you think the stock trades in the coming weeks.

I am inclined to think that with the selloff, institutions will be eager to get long if they had originally had no position. Others may take the chance to pick up more while the stock is on sale. The important thing to remember is these are all guesses. Nobody knows where the stock will be a day, week, or month from now.

What I am pretty sure of however, is that a short term option play to the long side could pay handsomely as the stock opens up into very oversold territory. It might very well bounce only to fall again, but my money will be on buying short term calls at the open. As I type this, FB is trading near $170 in premarket. My VBSR RRR charts indicate of course heavily skewed upside reward so for me, it is a matter of how aggressive to play. I am planning to put on two separate positions, one regular and one “flyer” position should $FB rally back strongly.

Aug 3 weekly $180 strike calls will likely be the regular position and I’ll likely take a $200 strike call or 3 as a “lotto.”

Don’t sleep on Zuck.

Good luck out there.