Meta's legal troubles has options traders eyeing the 'jade lizard'
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- Meta Platforms shares are off more than 30% from their highs of a year ago, making the stock the worst performer in the 'Magnificent Seven' over the past 12 months
- Opening statements began in Oakland where 29 state attorneys general accuse Meta of deliberately designing Facebook and Instagram to hook young users
- Behind that case sit more than 3,000 personal-injury suits in federal MDL, roughly 1,300 school-district claims, a nearly $1 billion New Mexico judgment, and a $6 million bellwether loss in Los Angeles
- Meta's market cap has fallen more than $600 billion so far, yet the stock trades at about 22 times earnings with revenue still growing 28%
- The article recommends a 'jade lizard' trade — selling an out-of-the-money put plus an out-of-the-money call spread — structured so that if total premium collected exceeds the call spread width, upside risk is eliminated entirely
- The suggested September 25th expiration captures some of the lawsuit-inflated implied volatility while sidestepping Q3 earnings in late October and falling short of the trial's anticipated six-to-eight-week length
Why it matters: With shares already down 30%+ and revenue still growing 28%, the article argues most of Meta's downside has been priced in, but a seven-week trial caps any sustained rally — a combination that creates ideal conditions for premium collection rather than directional bets. The September 25th expiration window gives traders a specific, time-bounded opportunity to capture inflated implied volatility before Q3 earnings in late October.
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