Meta Stock prices have become the market’s muse, and their meteoric rise has exhausted every superlative in the English vocabulary. What hasn’t been talked about much is what this surge has done to option prices.
Fueling this optimism was Meta’s surprise release of its new artificial intelligence-powered consumer hardware product, the Muse Charm, following the highly successful launch of its AI agent, Muse. The launch of this hardware is a big move. After some of Meta’s early hardware releases proved to fall short of initial expectations, the charm represents Meta’s ambition to circumvent the Apple-Google duopoly by offering a dedicated keychain-sized device that users can interact with at any time.
The soaring stock prices also affected the options market. Volatility Movement: The meta’s one-month implied volatility (IV) is currently hovering around 44%. This is about one standard deviation above the past year average of 37%, suggesting that premiums for short-term options are historically rich. To take advantage of this increased volatility while maintaining a bullish long-term stance, traders can build their own strategies that collect time decay to fund directional bets.
Meta, year-to-date
One very efficient approach is to deploy a short strangle with a close date, perhaps about a month in the future, such as an October 30 expiration date. By writing out-of-the-money calls and out-of-the-money puts in late October, traders can capture premiums that have risen as the time value of money rapidly declines.
The premium collected from that short-term strangulation can then be used to fund longer-dated January long calls. Even if the cost of a long-term call is higher than the recovery cost of a near-expiring option, the trade’s carry can still be positive because short-term options have more “theta” (decay). Ideally, we’d like Meta stock to stay between $700 and $900 by the October expiration and then rise towards the end of the year.
This structure effectively subsidizes the out-of-pocket costs of January calls and provides leveraged exposure to a bullish meta heading into the new year while taking advantage of short-term volatility crashes.
Muse Charm wasn’t the only hardware win at Connect. Meta’s broader spatial computing and wearables strategy continues to accelerate. In addition to Charm, the company introduced lightweight virtual reality goggles and new audio-only smart glasses to further strengthen its lead in ambient computing.
Additionally, Muse has already secured deep retail integration, allowing AI to connect seamlessly with leading companies such as Walmart, Best Buy, and Gap. Meta is becoming the foundational layer of how consumers interact with agent AI.
With an excellent hardware funnel and an options market that commands attractive near-term premiums, Meta looks poised to make a strong jump into 2027.
Disclosure: Tidal owns/holds all securities mentioned in the article.
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