New Options Available for Meta Platforms: Insights and Strategies

Investors in Meta Platforms Inc (Symbol: META) welcomed new options for the February 28th expiration today. Stock Options Channel’s YieldBoost formula analyzed the META options chain and found two noteworthy contracts: one put and one call.

The put contract at the $605.00 strike price has a current bid of $30.45. Selling this put contract means the investor agrees to buy the stock at $605.00 while collecting the premium. This brings the effective cost of the shares down to $574.55, excluding broker fees. For investors who want to buy META shares, this option is appealing compared to the current market price of $609.45.

Notably, the $605.00 strike is roughly 1% below the current stock price, making it slightly out-of-the-money. There’s a 57% chance that this put contract will expire worthless, based on current data. If this occurs, the premium would yield a 5.03% return on the cash commitment, or an impressive 36.02% annualized, a measurement we refer to as YieldBoost.

Below is a chart illustrating Meta Platforms Inc’s trading history for the past twelve months, highlighting the position of the $605.00 strike price:

Now, examining the calls side of the options chain, we see a call contract at the $625.00 strike price with a current bid of $31.70. An investor purchasing shares at the current price of $609.45 and selling this covered call would agree to sell the stock at $625.00. This would generate a total return of 7.75% if the stock is called away by the February 28th expiration, not counting dividends or broker fees. However, substantial upside may be forfeited if META shares rise significantly, highlighting the importance of analyzing past trading data and the company’s fundamentals.

Here’s a chart of META’s trading history with the $625.00 strike noted:

The $625.00 strike price reflects about a 3% premium over the current stock price, placing it slightly out-of-the-money as well. There’s a 51% probability that this covered call will expire worthless, allowing the investor to keep both their shares and the collected premium. If that happens, the premium would add a 5.20% extra return for the investor, or 37.23% on an annualized basis, again termed as YieldBoost.

The implied volatility for the put contract is 40% while the call contract shows a volatility of 41%. In contrast, actual trailing volatility, calculated using the last 251 trading days and today’s market price of $609.45, stands at 36%. For further options contract strategies, visit StockOptionsChannel.com.

Top YieldBoost Calls of the Nasdaq 100 »

Also see:

• Good Cheap Growth Stocks To Buy
• Institutional Holders of EAD
• CHT shares outstanding history

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