Posted in Current Events
By: Tom Gentile on February 3rd, 2022 • 2 mins read
Meta Platforms, Inc. Misses Earnings and Guides Lower
Earnings for the fourth quarter for Meta Platforms, Inc. (NYSE: FB) came in at $3.67, This is less than the 3.84 analysts were expecting. It did however beat on revenue for the quarter coming in at $33.67 billion vs. $33.4 billion estimated.
They also guided lower on revenue growth expectations for the next quarter.
Major Drop in Stock Price on Meta Platforms, Inc. (NYSE: FB)
You can read more online about all the specifics that went in to the report and their guidance, but I will mention what most are focusing on and that is their share price right now.
The stock dropped between 23-25% trading at $241 and change at the time of this writing.
An Interesting Option Strategy Consideration for Meta Platforms / Facebook
Usually after a company announces earnings there is a drop in the Implied Volatility (IV) of their options.
This time, likely due to the earnings miss and poor next quarter guidance, volatility hasn’t dropped off that much.
Instead of buying options with high IV one can consider selling that high IV in the form of a Call Credit Spread.
Assess a price point with a short-term expiration, like in a couple of weeks or less, and price out selling to open a strike with that price you don’t think it will hit in a couple of weeks or less and Buy to Open on the same order ticket a strike with the same month’s expiration just under that and see if the potential ROI looks appealing to you.
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.