DailyPlay – Meta Platforms Inc (FB) –  February 7th, 2022

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FB Bullish Trade Idea:
Our bullish trade idea for today is Meta Platforms Inc (FB). Meta declined significantly after its recent earnings announcement indicated very slow user growth and a sluggish start to its Metaverse segment. However, from a valuations perspective, FB is attractive as it is now trading at July 2018 levels despite profitability currently twice as high as it was back then. 

The trade structure used is a Call Diagonal. By selling a shorter dated call option, we are reducing the cost basis of the more expensive, longer dated call. As we approach expiration for the shorter dated call option, we will be looking to roll the short call to collect more premium and reduce the overall cost basis further. 

View FB Trade