{"id":4141,"date":"2026-04-28T18:31:26","date_gmt":"2026-04-28T18:31:26","guid":{"rendered":"https:\/\/www.finznest.com\/blog\/meta-shares-look-iffy-into-earnings-how-to-trade-it\/"},"modified":"2026-04-28T18:31:26","modified_gmt":"2026-04-28T18:31:26","slug":"meta-shares-look-iffy-into-earnings-how-to-trade-it","status":"publish","type":"post","link":"https:\/\/www.finznest.com\/blog\/meta-shares-look-iffy-into-earnings-how-to-trade-it\/","title":{"rendered":"Meta shares look &#8216;iffy&#8217; into earnings. How to trade it"},"content":{"rendered":"<div id=\"SpecialReportArticle-ArticleBody-6\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"SpecialReportArticle-articleBody-6-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-108297970\">\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-108297970\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000411054\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><span class=\"InlineVideo-videoButton\"\/><span\/><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"SpecialReportArticle-QuoteInBody-1\">Meta<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> heads into earnings Wednesday after the bell with the fundamentals case largely intact. <\/p>\n<p>Ad-pricing improvements and sharper targeting continue to drive roughly 30% year over year top-line growth \u2014 a number that commands respect at this scale. The options market implies a substantial 7.5% move by the end of the week. That&#8217;s a lot for a company this big, but it&#8217;s justified given the big moves Meta has seen following earnings recently (the stock moved more than 10% following earnings in three of the last four quarters).<\/p>\n<p>We&#8217;ve seen some big call buying lately. The June in-the-money 620 strike calls, for example, saw substantial opening buyers Monday. So did the May $675 calls, which cost substantially less and are more focused specifically on earnings. <\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">The trade<\/h2>\n<div class=\"group\">\n<p>Personally, I wouldn&#8217;t buy the stock or either of those two calls; instead, I would look to trade a spread \u2014 specifically, the 625\/680\/750 call spread risk reversal \u2014 selling the 625 puts and 750 calls to help finance the purchase of the 680-strike at-the-money calls.<\/p>\n<p>Here&#8217;s why.<\/p>\n<p>First, technically, despite the solid fundamental backdrop, the technicals are a bit more iffy. Meta is lingering around the 150-day moving average, and, having recently fallen below it, this reversion may be a head fake. Other technical signals, such as the commodity channel index and Bollinger bands, also indicate that the stock&#8217;s position is precarious.<\/p>\n<\/div>\n<div>\n<div class=\"Collapsible-proliveCollapsableContainer\" role=\"button\" tabindex=\"0\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"256\" height=\"256\" viewbox=\"0 0 256 256\" aria-labelledby=\"title desc\" role=\"img\" focusable=\"false\" preserveaspectratio=\"xMinYMin\" class=\"Collapsible-stockChartIcon\"><title>Stock Chart Icon<\/title><desc>Stock chart icon<\/desc><g transform=\"translate(1.4065934065934016 1.4065934065934016) scale(2.81 2.81)\"><path d=\"M 87.994 0 H 69.342 c -1.787 0 -2.682 2.16 -1.418 3.424 l 5.795 5.795 l -33.82 33.82 L 28.056 31.196 l -3.174 -3.174 c -1.074 -1.074 -2.815 -1.074 -3.889 0 L 0.805 48.209 c -1.074 1.074 -1.074 2.815 0 3.889 l 3.174 3.174 c 1.074 1.074 2.815 1.074 3.889 0 l 15.069 -15.069 l 14.994 14.994 c 1.074 1.074 2.815 1.074 3.889 0 l 1.614 -1.614 c 0.083 -0.066 0.17 -0.125 0.247 -0.202 l 37.1 -37.1 l 5.795 5.795 C 87.84 23.34 90 22.445 90 20.658 V 2.006 C 90 0.898 89.102 0 87.994 0 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 65.626 37.8 v 49.45 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 23.518 L 65.626 37.8 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 47.115 56.312 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 42.03 L 47.115 56.312 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 39.876 60.503 c -1.937 0 -3.757 -0.754 -5.127 -2.124 l -6.146 -6.145 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 59.844 C 41.952 60.271 40.933 60.503 39.876 60.503 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 22.937 46.567 L 11.051 58.453 c -0.298 0.298 -0.621 0.562 -0.959 0.8 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 48.004 L 22.937 46.567 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><\/g><\/svg><\/p>\n<div class=\"Collapsible-proLivePlayerCloseOrExpand\"><img decoding=\"async\" src=\"https:\/\/static-redesign.cnbcfm.com\/dist\/a54b41835a8b60db28c2.svg\" class=\"Collapsible-dismissButton\" alt=\"hide content\" title=\"\"><\/div>\n<\/div>\n<p><iframe title=\"Meta, 1 year\" src=\"https:\/\/www.cnbc.com\/appchart?symbol=META&amp;range=1Y&amp;type=mountain&amp;embedded=true&amp;$DEVICE$=undefined\" height=\"460\" scrolling=\"no\" loading=\"lazy\" style=\"border:0;width:100%\"><\/iframe><\/p>\n<p>Meta, 1 year<\/p>\n<\/div>\n<div class=\"group\">\n<p>Second, a quick review of the stock&#8217;s performance around earnings shows that buying the stock into the print is a bit of a coin toss. Was the stock higher two weeks after earnings more often than not? Yes, but just barely. The histogram below shows that stock buyers would have had an average return of 0.92%\u00a0by buying META into the earnings print and holding for two weeks thereafter. That works out to an annualized rate of return of almost 16.8%. That&#8217;s not terrible, but given the volatility of returns, not necessarily the risk\/reward ratio we&#8217;re looking for. Here&#8217;s a histogram of what those returns would look like over the past 44 reported quarters.<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed InlineImage-inlineInfographic\" id=\"ArticleBody-InlineImage-108298368\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div class=\"InlineImage-imagePlaceholder\" style=\"padding-bottom:56.17977528089888%\">\n<div><button class=\"InlineImage-closeEnlargedImage\"><svg width=\"20\" height=\"20\" viewbox=\"0 0 20 20\" fill=\"#002F6C\" aria-labelledby=\"title desc\" role=\"img\" focusable=\"false\" data-analytic-id=\"expand-icon\" class=\"InlineImage-background\"><title>Zoom In Icon<\/title><desc>Arrows pointing outwards<\/desc><circle cx=\"10\" cy=\"10\" r=\"10\" fill=\"white\" stroke=\"#002F6C\"\/><path d=\"M9.20185 10.7982C8.96049 10.5568 8.57037 10.5568 8.32901 10.7982L5.67901 13.4482V11.2346C5.67901 10.8938 5.40308 10.6173 5.06173 10.6173C4.72037 10.6173 4.44444 10.8938 4.44444 11.2346V14.9383C4.44444 15.279 4.72037 15.5556 5.06173 15.5556H8.76543C9.10679 15.5556 9.38271 15.279 9.38271 14.9383C9.38271 14.5975 9.10679 14.321 8.76543 14.321H6.55185L9.20185 11.671C9.44321 11.4296 9.44321 11.0395 9.20185 10.7982ZM14.9383 4.44446H11.2346C10.8932 4.44446 10.6173 4.721 10.6173 5.06174C10.6173 5.40248 10.8932 5.67903 11.2346 5.67903H13.4481L10.7981 8.32903C10.5568 8.57038 10.5568 8.96051 10.7981 9.20187C10.9185 9.32224 11.0765 9.38273 11.2346 9.38273C11.3926 9.38273 11.5506 9.32224 11.671 9.20187L14.321 6.55187V8.76545C14.321 9.10619 14.5969 9.38273 14.9383 9.38273C15.2796 9.38273 15.5556 9.10619 15.5556 8.76545V5.06174C15.5556 4.721 15.2796 4.44446 14.9383 4.44446Z\"\/><\/svg><\/button><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Buying a call offers defined risk and would not take the punishment of some of those larger drawdowns, which is certainly appealing; that&#8217;s probably what the May 675 call buyers were thinking. Keep big upside, but minimize the downside, shown here.<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed InlineImage-inlineInfographic\" id=\"ArticleBody-InlineImage-108298369\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div class=\"InlineImage-imagePlaceholder\" style=\"padding-bottom:56.17977528089888%\">\n<div><button class=\"InlineImage-closeEnlargedImage\"><svg width=\"20\" height=\"20\" viewbox=\"0 0 20 20\" fill=\"#002F6C\" aria-labelledby=\"title desc\" role=\"img\" focusable=\"false\" data-analytic-id=\"expand-icon\" class=\"InlineImage-background\"><title>Zoom In Icon<\/title><desc>Arrows pointing outwards<\/desc><circle cx=\"10\" cy=\"10\" r=\"10\" fill=\"white\" stroke=\"#002F6C\"\/><path d=\"M9.20185 10.7982C8.96049 10.5568 8.57037 10.5568 8.32901 10.7982L5.67901 13.4482V11.2346C5.67901 10.8938 5.40308 10.6173 5.06173 10.6173C4.72037 10.6173 4.44444 10.8938 4.44444 11.2346V14.9383C4.44444 15.279 4.72037 15.5556 5.06173 15.5556H8.76543C9.10679 15.5556 9.38271 15.279 9.38271 14.9383C9.38271 14.5975 9.10679 14.321 8.76543 14.321H6.55185L9.20185 11.671C9.44321 11.4296 9.44321 11.0395 9.20185 10.7982ZM14.9383 4.44446H11.2346C10.8932 4.44446 10.6173 4.721 10.6173 5.06174C10.6173 5.40248 10.8932 5.67903 11.2346 5.67903H13.4481L10.7981 8.32903C10.5568 8.57038 10.5568 8.96051 10.7981 9.20187C10.9185 9.32224 11.0765 9.38273 11.2346 9.38273C11.3926 9.38273 11.5506 9.32224 11.671 9.20187L14.321 6.55187V8.76545C14.321 9.10619 14.5969 9.38273 14.9383 9.38273C15.2796 9.38273 15.5556 9.10619 15.5556 8.76545V5.06174C15.5556 4.721 15.2796 4.44446 14.9383 4.44446Z\"\/><\/svg><\/button><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>It&#8217;s true that the downside moves were capped at just about 5%. Now the problem is that, because the stock has to move higher than the call strike price by the premium paid, it loses less on big downswings but loses more often. In fact, historically, spending 5% on an at-the-money call option expiring in two weeks would have resulted in a loss overall.<\/p>\n<p>Here&#8217;s where the call spread risk reversal aims to reduce the upside breakeven, reduce downside exposure, and increase the odds of success.<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed InlineImage-inlineInfographic\" id=\"ArticleBody-InlineImage-108298370\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div class=\"InlineImage-imagePlaceholder\" style=\"padding-bottom:56.17977528089888%\">\n<div><button class=\"InlineImage-closeEnlargedImage\"><svg width=\"20\" height=\"20\" viewbox=\"0 0 20 20\" fill=\"#002F6C\" aria-labelledby=\"title desc\" role=\"img\" focusable=\"false\" data-analytic-id=\"expand-icon\" class=\"InlineImage-background\"><title>Zoom In Icon<\/title><desc>Arrows pointing outwards<\/desc><circle cx=\"10\" cy=\"10\" r=\"10\" fill=\"white\" stroke=\"#002F6C\"\/><path d=\"M9.20185 10.7982C8.96049 10.5568 8.57037 10.5568 8.32901 10.7982L5.67901 13.4482V11.2346C5.67901 10.8938 5.40308 10.6173 5.06173 10.6173C4.72037 10.6173 4.44444 10.8938 4.44444 11.2346V14.9383C4.44444 15.279 4.72037 15.5556 5.06173 15.5556H8.76543C9.10679 15.5556 9.38271 15.279 9.38271 14.9383C9.38271 14.5975 9.10679 14.321 8.76543 14.321H6.55185L9.20185 11.671C9.44321 11.4296 9.44321 11.0395 9.20185 10.7982ZM14.9383 4.44446H11.2346C10.8932 4.44446 10.6173 4.721 10.6173 5.06174C10.6173 5.40248 10.8932 5.67903 11.2346 5.67903H13.4481L10.7981 8.32903C10.5568 8.57038 10.5568 8.96051 10.7981 9.20187C10.9185 9.32224 11.0765 9.38273 11.2346 9.38273C11.3926 9.38273 11.5506 9.32224 11.671 9.20187L14.321 6.55187V8.76545C14.321 9.10619 14.5969 9.38273 14.9383 9.38273C15.2796 9.38273 15.5556 9.10619 15.5556 8.76545V5.06174C15.5556 4.721 15.2796 4.44446 14.9383 4.44446Z\"\/><\/svg><\/button><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Notice that the call spread risk reversal would have won far more often than either buying the stock or buying calls. It still takes the risk of owning the stock, but because the short put option is 8% below the current stock price, the worst-case loss will always be at least 8% better than the risk of buying the stock, and losses of less than 8% in the share price are avoided entirely. <\/p>\n<p>The tradeoff is that the upside gains are capped at 8%, and Meta has made moves much greater than that a few times following earnings, but overall, the improved win rate of the trade means the average historical performance of a trade like this is better than either long stock or a long short-dated at-the-money call. In this case, a trade like this would have averaged about 1.6%, or almost 29% annualized.<\/p>\n<p>Risk less. Make more.<\/p>\n<\/div>\n<div class=\"ArticleBody-googlePreferredSourceContainer\" data-module=\"GooglePreferredSource\" data-id=\"SpecialReportArticle-GooglePreferredSource-6\">Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Meta heads into earnings Wednesday after the bell with the fundamentals case largely intact. Ad-pricing improvements and sharper targeting continue to drive roughly 30% year over year top-line growth \u2014 a number that commands respect at this scale. The options market implies a substantial 7.5% move by the end of the week. That&#8217;s a lot [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4142,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[213,3103,447,273,381],"class_list":["post-4141","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-earnings","tag-iffy","tag-meta","tag-shares","tag-trade"],"_links":{"self":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts\/4141","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/comments?post=4141"}],"version-history":[{"count":0,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts\/4141\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/media\/4142"}],"wp:attachment":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/media?parent=4141"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/categories?post=4141"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/tags?post=4141"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}