11/20/2022 Plan:
This week we look at a trade in Meta Platforms (formerly known as Facebook) (Ticker: META)
11/20/2022 Plan (continued):
- META – Sell Dec 16 95 put for 0.96 OR
- META – Sell Dec 23 95/90 put spread for 0.50
- Prices are as of market close 11/18/2022, actual fill and strikes may differ depending on Monday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
11/20/2022 Commentary:
META is Way off from its highs. The outcome on their Giant bet on the metaverse is not yet clear. They are certainly burning through a lot of R&D, though. They still have billions (with a ‘b’) of users and a lot of money is coming in. Will the changes from Apple prevent them from being as profitable and therefore the devaluation is warranted? Time will tell. In the meantime, if you want to get long at low levels, selling a put has a nice return over the next several weeks. If you prefer just a trade and don’t want to own shares, then pushing out a week later with a put spread is a fine choice. The short strike is $17 away from where META is currently trading. It *can* certainly move that much in this time period – its recent low was a bit above $88.
Feel free to Reach out with questions on this or anything else!
11/21/2022 Entry:
Sold META Dec 23 94/89 put spreads for 0.53
11/27/2022 Update:
The META put spreads can be closed for 0.32 for a quick $21 profit per put spread sold. I’m holding to try for additional profits, no change planned to the trade at this time.
12/4/2022 Update:
The META put spreads are down to 0.06. With three weeks to go, I’d suggest taking these off rather than keeping the risk on one’s books to pick up 0.02/week (on average). I’ll look to close this week, ideally tomorrow. Enjoy the win!
12/11/2022 Update:
The META put spreads are down to 0.08 with over $20 between the current stock price and our short strikes. If you didn’t take them off as suggested, feel free to take them off at any time this week. They expire next week. I actually missed taking them off as I was busy last week and didn’t need to re-allocate the capital. Manage your risk to suit your needs, of course.
12/18/2022 Update:
The META put spreads are effectively worthless right now. If you can take them off for 0.01 or 0.02, go ahead and do it, otherwise you can (likely) let them expire worthless at the end of the week. You can also buy a cheap put above our short strike to turn it into a ‘disaster’ hedge.
12/24/2022 Close:
I closed the short puts for 0.01 on 12/19, leaving the long puts on as a lottery ticket, which expired worthless as expected. That is a $52 profit per put spread sold for META. A nice win as we near the end of 2022.
