Options Strategist
Here, we can construct the following Vertical Call Spread:
Sell to Open META 18-Aug-23 320 Call
Buy to Open META 18-Aug-23 325 Call
The premium received for this strategy is $130, which also represents the maximum potential profit. The maximum risk, or the most you could lose if the stock price moves significantly, is $370. The breakeven point at expiration is $321.3.
The probability of profit for this strategy is 62.65%, with 43 days to expiration. The implied volatility rank is 49.69%.
(the probability of profit is the theoretical probability of profit based on the delta of the options)
This strategy allows you to potentially profit from a bearish outlook on META, where you expect the price to decrease.
The strategies explained above are short volatility/limited reward strategies intended to take advantage of a higher theoretical probability of profit. There are of course a lot of other strategies possible. For example: if expecting a significant directional move, you can consider owning a long put or long call strategy, or a long put spread or long call spread. In a future article I'll explain the differences between the short and long strategies in general.
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