Meta Platforms Inc Introduces New Long-Term Options for Investors

Investors in Meta Platforms Inc (Symbol: META) welcomed new options that began trading today, with a December 2027 expiration. A significant factor influencing the price an option buyer is willing to pay is its time value. With 1,015 days until expiration, these newly traded contracts may provide sellers of puts or calls an opportunity to secure a higher premium compared to contracts with shorter expirations. Utilizing our YieldBoost formula, Stock Options Channel has analyzed the META options chain to identify one put and one call contract of particular interest.

Analyzing the Put Contract

The put contract at the $620.00 strike price currently has a bid of $117.00. If an investor sells to open this put contract, they are committed to buying the stock at $620.00. Additionally, they will collect the premium, resulting in an effective cost basis of $503.00 per share (before broker commissions). For investors considering purchasing shares of META, this could be a compelling alternative to the current price of $623.77 per share.

This $620.00 strike price represents approximately a 1% discount to the current trading price, indicating that it is out-of-the-money by that same percentage. Current analytical data suggests a 70% chance that the put contract may expire worthless. Stock Options Channel will closely monitor these odds, updating them over time and publishing a chart on our website’s contract detail page. If the contract does expire worthless, the premium would provide an 18.87% return on the cash commitment, or an annualized return of 6.79%, which we refer to as the YieldBoost.

Reviewing the Recent Trading History

Below is a chart depicting the trailing twelve month trading history for Meta Platforms Inc, highlighting where the $620.00 strike is situated relative to that history:

What About the Call Contract?

Turning our attention to the calls side of the option chain, the call contract at the $770.00 strike price currently has a bid of $127.00. Should an investor choose to buy shares of META at the current price of $623.77 and sell to open this call contract as a “covered call,” they would be agreeing to sell the stock at $770.00. Including the premium collected, this arrangement could yield a total return of 43.80% (excluding dividends) if the stock is called away at the December 2027 expiration, before broker commissions. However, significant upside potential may remain if META shares surge, underscoring the importance of examining past trading history and fundamental analyses.

Below is a chart illustrating META’s trailing twelve month trading history, with the $770.00 strike highlighted:

The $770.00 strike price is approximately 23% above the current trading share price, making it out-of-the-money by the same percentage. This indicates a possibility that the covered call contract may expire worthless, allowing the investor to retain both their shares and the collected premium. Current analytical data suggests a 44% chance of this scenario occurring. Stock Options Channel will continue to track this data and update it over time, publishing a chart of the trading history for the option contract as well. If the covered call contract does not expire, the premium would deliver a 20.36% boost in returns or 7.32% annualized, which we also refer to as the YieldBoost.

The implied volatility for the put contract is currently 40%, while for the call contract it sits at 37%. In contrast, we calculate the actual trailing twelve month volatility—considering the last 250 trading days and today’s price of $623.77—to be 31%. For more insights on put and call options worth exploring, visit StockOptionsChannel.com.

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