Meta's $680 put after an 11% Muse rally: 29.7% annualized, earnings inside

The setup in 30 seconds

Meta jumped 11.3% on Monday, Sept 21, closing at $741.25 on 48.7 million shares, after Wells Fargo raised its price target to $796 from $640 and Meta's new Muse AI app hit No. 1 on Apple's US App Store. The stock is now up about 29.5% since Aug 31. For a wheel seller, that kind of run cuts two ways: put premium is rich, but the stock is stretched. This idea sells a put well under the rally, at a strike that sits right on Monday's gap-day low of $679.60, and it has to live through Meta's next earnings report.

The trade

Why this stock, why now

Technicals. RSI(14) is 76.0, overbought territory. The close sits far above the 20-day ($633.06), 50-day ($610.42) and 200-day ($625.11) averages, so the long-term trend is up. Sept 22 volume was 28.1 million shares, 1.33× the 20-day average of 21.2 million. In plain terms: the trend is strong, but the stock ran fast, so a pullback toward the gap would not be surprising. That is why the strike sits under Monday's gap-day low, not near the price.

Valuation. StockAnalysis shows META at 22.9× forward earnings, versus 26.2× for Alphabet and 25.2× for Microsoft (Sept 23); MarketBeat shows a higher 27.1×, so treat the gap as approximate. Growth backs it up: Q2 2026 revenue was $60.80 billion, up 28% year over year. The catch is spending: Meta guides 2026 capital spending to $130–145 billion. In plain terms: the stock is not expensive next to its big-tech peers, but investors are paying for AI spending to pay off.

Income. IV30 is 42.3%, below the 60-day realized volatility of 49.9%, so options are not unusually rich against how much the stock has actually moved. The Oct 30 contract carries 48.4% implied volatility, versus 42.5% for Oct 23 strikes, which is the market pricing an earnings move. In plain terms: most of the extra premium here is payment for sitting through earnings.

Calendar. Meta Connect starts Sept 23. Macro dates: GDP and PCE on Sept 30, the September jobs report on Oct 2, and the Fed decision on Oct 28. Meta has not confirmed its Q3 report date; MarketBeat and StockAnalysis estimate Oct 28, while Nasdaq (Zacks) estimates Nov 4. The $0.525 dividend went ex on Sept 21, so none falls in this window. In plain terms: plan as if earnings land before expiry.

The exit plan

• Take profit: buy the put back once it is worth about $10.24 (50% of the credit) or $8.19 (60%).
• Time exit: if it is still open, close or reassess between Oct 9 and Oct 16 (21 to 14 days left), before the earnings week.
• Roll trigger: a daily close below $700 with more than 14 days left → consider rolling down and out for a net credit, not into a bigger position.
• If assigned: you own 100 shares at a $659.52 net cost, then sell 30–45-day covered calls at or above $680.

What could go wrong

1. Earnings gap: a weak Q3 outlook or bigger capex could send META back toward the $665.75 pre-rally close or lower, straight through the strike.
2. The rally fades: with RSI at 76.0 and the price about $108 above the 20-day average, a normal cool-off could bring the stock to the strike even without bad news.
3. Big cash, one name: $68,000 per contract ties a lot of capital to one stock through a Fed day and an earnings report.

Beginner corner

The "29.7% annualized" figure is a comparison tool, not a forecast. It assumes you could repeat this 37-day trade about ten times a year with the same result, which never happens exactly. The real number to remember is the 3.01% you can earn on $68,000 in 37 days, and the full downside below $659.52 if Meta falls hard.