Facebook Parent Meta Sees Bullish Put Option Positions Ahead of Earnings

Luzi Ann Santos joined discussion · Oct 30, 2024 00:18

$Meta Platforms (META.US)$ saw more than $13 million in combined bullish unusual put option trades a day before the release of earnings for the social media giant that has surpassed expectations for six straight quarters.

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.

(For the options market page, click here.)

Facebook Parent Meta Sees Bullish Put Option Positions Ahead of Earnings

(To see unusual options trades, click here. For Meta's options chain, click here.)

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.

The bullish trades were posted as Meta shares resumed their rally toward a record high amid optimism that the company's edge in deploying AI for ad targeting will continue to drive revenue higher. The stock climbed 66% this year, almost triple the pace of gains for the $NASDAQ 100 Index (.NDX.US)$ and the $S&P 500 Index (.SPX.US)$.

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.

Share your thoughts on Meta in the comments section below. And if you have a price forecast, please vote below.

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