Facebook Parent Meta Sees Bullish Put Option Positions Ahead of Earnings

Three of the four unusual option trades were posted at 10:02:03 a.m. New York time Tuesday. An active seller or sellers collected a premium of $10.97 million for the put options that give the holders the right to sell a combined 447,600 Meta shares at $570 by Nov. 22.

Those contracts, which were sold at $24.50 per share, could be profitable for the seller if Meta's shares stay above that strike price of $570 when they expire, rendering the put options worthless. Shares traded at $588.07, up 1.7% at 11:13 a.m. Each of the put option covers 100 shares.

On average, analysts expect Facebook parent Meta to report tomorrow an 18% growth in revenue to $40.25 billion for the third quarter, according to estimates compiled by Bloomberg. Advertising revenue is seen rising to $39.7 billion, from $33.6 billion a year earlier. Earnings are forecast to grow to $5.25 per share for the third quarter, from $4.39 a year earlier, estimates show.

"Meta is executing best across the group & has earned the right to spend big on AI, with strong core operating results, early AI benefits in engagement & monetization, & clarity on the AI product roadmap," JPMorgan analysts wrote in a note Oct. 11. "Meta is the best owned name in the group & we expect continued strong revenue growth driven by AI investments, Reels, Click-to-Message, Shop Ads & Video," they cite as they reviewed the prospects of Magnificent Seven stocks.

Tuesday's share price gain took Meta above the middle line of the Bollinger band. While that signals to some who study chart that the trend could be relatively bullish, six other technical indicators found on the moomoo app are signaling that the stock could be overbought and the trend may be turning bearish.

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