Meta’s AI Pivot Sparks Bullish Sentiment Among Options Traders

Meta Platforms appears to be reclaiming its momentum as its strategic investments in artificial intelligence fuel a potential recovery for the $1.7 trillion company, following a nearly year-long period of stock stagnation.

Shares of the social media conglomerate surged over 6% on Friday, reaching their highest price since April. This rally builds upon gains seen earlier this month, sparked by the company’s announcement regarding plans to monetize its AI computing capacity. Momentum was further bolstered on Thursday by the launch of Muse Spark 1.1, an AI-driven coding tool positioned to compete directly with industry leaders Anthropic and OpenAI. Despite this recent surge, Meta’s shares remain essentially flat for the year, trailing the Nasdaq-100’s 18% climb.

Options activity surged on Friday, with volume projected to exceed three times its 30-day average. According to data from Cboe LiveVol and SpotGamma, 78% of the stock’s $1.8 billion in options premium was concentrated in call options. While some call activity was likely balanced by selling, call buying significantly outpaced put buying, with calls accounting for eight of the top 10 contracts by volume at midday.

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Meta, 1 year

The five most active trades were all short-term contracts expiring Friday afternoon, as traders sought to capitalize on the immediate upward trend. The most prominent position was the $675 strike call expiring Friday, priced at approximately $3 per contract, which requires Meta to climb an additional 2% before the market close to reach profitability.

Among contracts with longer expirations, the most active was the July 17 700-strike, a position requiring a 6% price increase to break even.

While short-term traders favored the upside, some institutional players opted for a neutral outlook. The second-largest trade of the session involved a $29 million short straddle at the 670 strike, consisting of both puts and calls, signaling a bet that the stock will trade sideways over the next two months.

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