New Meta Options Offer Unique Buying Strategies for Investors

Investors in Meta Platforms Inc (Symbol: META) witnessed the launch of new options trading this week, specifically for the November 21st expiration. With 214 days until expiration, these contracts present sellers of puts or calls a potential opportunity to secure higher premiums than those available for near-term contracts.

Using our YieldBoost formula at Stock Options Channel, we’ve analyzed the META options chain focused on the new November 21st contracts. Our research has pinpointed one put and one call contract of significant interest.

Attractive Put Option Details

The put contract at the $470.00 strike price currently has a bid of $51.60. If an investor sells-to-open this put contract, they are agreeing to buy the stock at $470.00 while collecting the premium. This arrangement effectively lowers the cost basis for shares to $418.40 (excluding broker commissions), offering an appealing alternative to purchasing shares at the current price of $484.25 each.

Since the $470.00 strike represents approximately a 3% discount from the current trading price, it is considered out-of-the-money by that percentage. According to current analytical data, the odds of the put contract expiring worthless are estimated at 63%. Stock Options Channel will monitor these odds over time and publish updates on our website, including a chart displaying this information. If the contract were to expire worthless, the premium collected would equate to a 10.98% return on the cash commitment, or an annualized return of 18.72%—a figure we designate as the YieldBoost.

Call Option Analysis

Shifting focus to the call options, the contract at the $510.00 strike price is currently bid at $56.65. An investor buying META shares at $484.25 each and simultaneously selling-to-open this call contract would be committing to sell shares at $510.00. Including the premium collected, this strategy could yield a total return of 17.02% if the stock is called away at the expiration date (again, excluding any dividends or commissions).

However, potential investors face the risk of missing out on substantial upside if META’s shares significantly increase in value. This emphasizes the importance of reviewing both the trailing twelve-month trading history for the company and its fundamental business metrics. Below is a chart highlighting the trading history of META, with the $510.00 strike outlined in red:

The $510.00 strike is approximately a 5% premium over the current trading price, meaning it is also out-of-the-money by that percentage. Consequently, there exists the possibility that this covered call might expire worthless. Should this occur, the investor would retain both their shares and the premium. Current data indicates the odds of the call contract expiring worthless at approximately 47%. As with the puts, Stock Options Channel will track these odds and update them, featuring a historical chart for the contract.

If the covered call were to expire worthless, the premium could represent an 11.70% enhancement to the investor’s return, which translates to an annualized rate of 19.95%, another example of our YieldBoost.

Volatility Insights

For the put contract, implied volatility stands at 44%, while the call contract exhibits a slightly lower implied volatility of 43%. Overall, our analysis shows the actual trailing twelve-month volatility—based on the last 249 trading day closings and today’s price of $484.25—as 37%. Investors looking for additional options contract strategies can explore more at StockOptionsChannel.com.

Top YieldBoost Calls of the Nasdaq 100 »

Also see:

• Funds Holding Q
• Top Ten Hedge Funds Holding ONL
• Top Ten Hedge Funds Holding ALSN

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.