Each week, I’ll give an overview of a stock and Licia Leslie will follow that up with a chart analysis the next day. Bill Griffo will chime in with macro analysis and Andrew Giovinazzi will then finish out the week with a volatility breakdown.

Have a stock YOU want us to review? Email my team here. – Mark

Hey Traders,

The Metaverse was short-lived. It’s still there, but somehow Apple Inc (Ticker: AAPL) puts out crazy expensive 3D goggles and the stock goes to ATH.

Meta Inc (Ticker: META) ditches the Facebook name and launches a Metaverse, and the stock goes down 70%. Go figure. Maybe folks were sick of Zuck and like Tim Cook better.  

I’m here to talk vol in META – still hard for me to call it META. The reality is that META is on a massive run to regain all of the value it lost in 2022. In a word … unreal. Three billion users is hard to replicate.

Two year chart in META with 90 day IV

Now it’s time to compare the vols to the last time it was around $300 – that was a while ago – to find some trading edge today.

How to Find an Edge in the IV

As of right now, IV is a bit higher than the long term average for 90 day IV.

Why did I pick 90 day? Well, the short term vol will be dominated by earnings. My guess is that META rallies since it’s so close to $300. 

Note the 30 day IV is about near its earnings area, but the net IV 90 is relatively low, about back to the level where it was prior to the big drop. I would like a 300 strike calendar play here, buying the longer term and selling the 30 day with an exit around $300.

I only see AI making the META franchise stronger, even with the adverse SCOTUS ruling. The longer term vol provides decent value here.

Do you have a stock idea for next week? Leave a comment below!

To Your Trading Success,

AG