Bearish Options Strategy on META Unveiled by Veteran Trader

Larry Ramer

Thu, Apr 3, 2025, 6:33 AM 1 min read

Since Meta (META) has outperformed its large-cap peers successful caller weeks, it's apt to underperform if the market, including the Nasdaq, sells off, Don Kaufman, a co-founder of TheoTrade, said connected Schwab Network yesterday.

With the marketplace selling disconnected sharply today, Kaufman's thesis looks acceptable to beryllium enactment to the test. He discussed an options strategy that investors tin usage to nett from a diminution of META banal implicit the adjacent 10 weeks oregon so.

The longtime trader recommended buying the $535 puts connected Meta that expire connected June 20 and selling the $525 puts that expire connected the aforesaid day. He noted that traders who usage this strategy volition wage a nett premium of $3 for each brace of puts.

Meta's Chart Analyzed

Appearing connected the aforesaid conception arsenic Kaufman, Schwab Network's Kevin Green reported that $530 to $540 could beryllium an country of enactment for the name. He believes that the banal could autumn to this level, and helium identified $600 arsenic an country of resistance.

The Recent Price Action of META Stock

In the past month, the shares person dropped 7%, portion they are down 3.5% successful the past 3 months.

While we admit the imaginable of META, our condemnation lies successful the content that immoderate AI stocks clasp greater committedness for delivering higher returns, and doing truthful wrong a shorter clip frame. If you are looking for an AI banal that is much promising than META but that trades astatine little than 5 times its earnings, cheque retired our study astir the cheapest AI stock.