Options traders are increasingly identifying Meta as the next significant opportunity in the consumer artificial intelligence sector, leading to a dramatic surge in market activity.
On Monday, Meta's options trading volume reached approximately 4.5 times its typical 30-day average. An impressive nearly $3.9 billion in total premium was exchanged, according to comprehensive data from Cboe LiveVol and SpotGamma. Analysis revealed that call options were likely purchased at more than double the rate of put options, with a clear bullish or neutral stance evident in seven out of the top ten trades.
Shares of the social media giant climbed by a robust 12% on Monday, bringing the stock within 7% of its all-time high. This recent jump extends a 21% rally since Meta first detailed its personal AI assistant, Muse. Furthermore, the company disclosed plans to develop 'Petal,' a new subsea cable designed to transmit data across the Atlantic ocean.
The most actively traded options contracts on Monday were zero-day-to-expiry options, with strikes now comfortably in the money, ranging from $720 to $745. Looking further out, significant volume was also observed in the $775 and $800 strike options expiring in mid-October.
Brent Kochuba, founder of the options analytics platform SpotGamma, highlighted the phenomenon, stating, "The inflows in options are huge. It seems like AI hype around their Muse."
Meta's Muse AI personal agent tool, launched on September 8th, has rapidly ascended app store rankings. A CNBC report, citing analytics firm Sensor Tower, indicated that Muse recorded 730,000 downloads within approximately five days of its debut.
Further insights from SpotGamma data show that call buyers likely initiated over $1.3 billion in call premium, contrasted with about $1.1 billion tied to selling. This suggests a strong bullish inclination, though accompanied by strategic hedging activity.
Notably, the session's largest dollar-size trader reportedly established a net $20 million short position across several spread trades. This involved the sale of a one-by-two 710/765-strike call spread expiring October 16, a strategy that profits if Meta's share price drops below $740.
