Meta Platforms (META) IV Skew Bullish Signal -> Long Call (At-the-Money)
We have seen news on $Advanced Micro Devices(AMD)$ and $Alphabet(GOOGL)$ over the past few days on the AI battle race.
But we need to remember that what would matter to the general public is how innovations would change the way consumers spend, cyberspace users go about in their daily activities. We have hear the news of AMD new chip (MI300) able to perform inference much better for larger LLMs.
Alphabet has also launch Gemini which is to help Bard, their chatbot, but how will these translate to number of users in the Cyberspace.
Stellar Q3 Earning Result
One company I think we should seriously look at is $Meta Platforms, Inc.(META)$ , they are known for Facebook, WhatsApp and Instagram, is the face of social media. Its shares also continue to grow, up 180% over the past year.
Their latest Q3 result have outperformed market expectation by raising its revenue to $34.15 billion, a 23% increase year over year. Its earnings per share also increased to $4.39, beating expectations.
Meta Innovation Drive and Insider Trade
In September, Meta has released their latest Quest 3 virtual reality headset. Recently, they have release the Meta AI chatbot on WhatsApp and Instagram.
These are things that are closer to the general public, which consumers are more likely to use virtual reality, and WhatsApp and Instagram daily active users are increasing.
October 2023 Most Popular Social Networks Worldwide By Active Users
These new AI feature will be a game-changer which shall play a significant part in Meta’s growth.
Stephen Mandel at Lone Pine Capital bought 2.8 million shares and Third Point Capital’s Daniel Loeb bought 1.1 million to establish new stakes in the owner of Facebook, Instagram, and WhatsApp. This is despite META founder, Mark Zuckerberg sold more than 300,000 shares.
This show the confidence of these elite insiders confidence in META.
In this article, I would like to share how I would trade META using Long Call (ATM).
Meta Platforms (META) Option Trading
As we can see that the option trading, we have a higher percentage of Call vs Put, the open interest for Call and Put is pretty close.
I see potential of more upside from Meta, so I decide to go for Long Call (ATM)
Meta Platforms (META) Volatility Skew
The implied volatility skew shows the market's bias for pricing in volatility risk to the option premium of downside puts and upside calls.
The implied volatility for downside puts is decreasing relative to upside calls, then that suggests the market is pricing in a larger positivity to an upside move.
The current skew indicator is showing a Bullish signal.
Meta Platforms (META) Long Call (Best By Theoretical Edge)
META Long Call Benchmark Index (30-Day Maturity, ATM) is unchanged today at 2.7% premium to stock price. This value is below its 52-week average premium of 4.1%.
The META Long Call Benchmark Index is designed to track the theoretical cost of buying an at-the-money call for an option with 30 days to maturity.
Meta Platforms (META) Option Contract 12/01/2024 (36 Days)
Buying a long at-the-money (ATM) call is one of the simplest possible option strategies. I have foresee a bullish position, and I would like to take unlimited upside gains.
I plan to buy an at-the-money call on the $325 strike for $13.05, I will make a gain once the stock go above $338.05 ($325 plus $13.05).
If the stock moves below $325, i will lose the amount I spend $13.05.
Summary
Based on the data I have gathered, I do see potential upside in Meta over the next 30 days, this is the reason why I intend to go for Long Call (At-the-money).
The current skew indicator also suggest bullish signal, I would think there should be more innovative announcement from META.
Appreciate if you could share your thoughts in the comment section whether you think META would continue to have its upside move in anticipation of more innovation from his AI project.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Long Meta sold too early and rebought average 172 for 300 shares.
I heard that AMD management is selling shares recently, is this true?
Both of these companies are actually worthy of our buying
Are you looking forward to AMD's new chips? ?
I was really surprised by Gemini's performance
Love meta keep going up please