Social media giant Meta Platforms (META) is up nearly 150% over the past year. One trader sees further upside in the month ahead.
That’s based on the April 26 $550 call options. With 35 days until expiration, 3,839 contracts traded compared to a prior open interest of 108, for a 35-fold rise in volume on the trade. The buyer of the calls paid $14.35 to make the bullish bet.
Meta shares recently traded for about $500, so would need to rise about $50, or 10% in the next month for the options to move in-the-money. Such a move would mean shares break over their 52-week high of $523.57.
Meta has had a strong year, with earnings surging by 201%, and revenues jumped 25%.
Shares are still inexpensive at about 20 times forward earnings, a slight discount to the overall market.
Action to take: Investors may like shares here as a momentum trade, as there’s more room for the stock to run higher. Meta also just started paying a dividend, and now yields 0.4%. Further increases are likely in time.
For traders, the April $550 calls are aggressive, but play to the stock’s current momentum.
Traders can likely see low-to-mid double-digit returns in the coming weeks on a further rally in shares. Traders should look to take a quick profit rather than risk holding until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.