$Meta Platforms, Inc.(META)$ - I sold META puts a couple days ago. Although I believe META can rebound in the future, the capital used to take on those put positions will likely be tied up for at least 3 months. As someone who tries to unite theory and practice, I didn't really feel like talking much tonight and wanted to remain quiet.
Despite lacking energy, I still need to maintain daily observations. An interesting question arises - after an earnings release, will market makers start killing off option positions?
Call options will undoubtedly get crushed. For META's put options this week, the 450, 470, 440, 400, 480 strikes have the highest open interest. Looking at the intraday movements, although market makers can't control everything, they still have the intention to "eliminate the evil forces". This could also partly explain why some stocks that sold off sharply after earnings had big intraday bounces - market makers cooperating with short-sellers to cover while killing off option positions, causing temporary stock rebounds.
However, whether META can sustain its rebound depends on the overall market perception. If funds see value in catching the falling knife, the rebound could sustain. Otherwise, it may just be a dead cat bounce before continuing lower.
$Microsoft(MSFT)$ - It's hard for me to predict MSFT's earnings move, but I estimate it will also see a rebound like META. Anyway, the large order given was a 380 strike strangle strategy, so we'll see how it plays out tomorrow.
$Alphabet(GOOGL)$ - Given the potential downside risk, there are two strategies to consider: 1) Simultaneously sell the 180 call and 135 put strangle $GOOGL 20240517 180.0 CALL$ $GOOGL 20240517 135.0 PUT$ ; 2) Buy the 155 at-the-money put $GOOGL 20240503 155 PUT$ .
$NVIDIA Corp(NVDA)$ $Tesla Motors(TSLA)$ $ - I've already discussed the trading thoughts on these previously and don't feel a need to add more. But it's worth noting that in an overall bearish trend, it's better to minimize bullish positions. For example, if trying to play for a bottom in Tesla by selling the 160 weekly put, it's better to choose a safer, lower strike for a wider margin of safety.
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.
But meta will rebound it’s the support line now
Great article, would you like to share it?