$META · Schwab Network · 2026-11-06

Meta shares are rising today, as they seek to recover their losses after yesterday's decline. The company faces the challenge that is weighing heavily on the technology sector this week: concerns about the political fallout associated with the expansion of artificial intelligence data centers.

In a statement following the elections, Meta President Dina Powell McCormick said the midterm election results could make it more difficult for companies to build new data centers.

Speaking at the Wall Street Journal Technology Conference, she acknowledged that the sector has not done enough to explain the benefits of large investments to local communities.

It is worth noting that Meta has data centers in about twenty states, with five planned projects with a capacity of 1 gigawatt or more.

The most important question for investors is: Will Meta's AI ambitions slow down just as it has been regaining some of its market value this year? Now, it's time to discuss meta platforms.

Before we move on to examples of your trades, I need to know your opinion of MetaTrader. Scott, I'll start with you. Your opinion on the fundamentals. Meta had been experiencing some recovery, but recently faced difficulties again.

It continues to face these major obstacles this year.

What do you think of Meta? There were significant obstacles, but every time we witnessed sales, it was an opportunity to buy.

So, you know, the whole data center situation, or dilemma, or whatever you call it, I think once things calm down a bit, we'll see in a couple of weeks, or maybe even a month, the big names, the leading companies; They are the ones who will make progress, in my opinion, whether it's Meta or Alphabet, or any other company you wish to follow.

Therefore, I am a big fan of Meta. I am not necessarily saying that we will return to higher levels tomorrow or next week. For this reason, when we talk about the trading example that I will mention here, let's give it some time.

Tom, I want to talk to you and hear your opinion about MetaTrader before we go into these trading examples. Yes, I think if we look at it, their recent earnings reflect, you know, a less likely impact of them on the architecture of artificial intelligence, don't you?

Whether it's chips, equipment, or semiconductor equipment manufacturers, compared to what Meta has, which is more than 3.6 billion daily users on its platforms in various fields.

That's why they have such a large number of users. As for their core business in advertising, they relied on it heavily, didn't they? Because they already have this large number of users, and they are pioneers in this aspect.

But at the same time, the possibility of creating an additional source of income through their Muse agent excited investors. We have now seen a decline in the share price, and as you know, they are not immune to market downturns in general, but a lot of optimism has returned to the stock despite the negative free cash flow.

They have just raised an additional $25 billion, an amount that exceeds their expectations at this stage.

So, yes, they are spending, aren't they? But will they be able to profit from artificial intelligence as efficiently as their competitors? Well, two or three months ago, before early September, there were questions about this, weren't there?

Then Muse appeared and became the most downloaded app on the Apple App Store at this point.

So, yes, they are making remarkable progress. Now, the focus will be on making a profit and keeping up with the competition, because each of these giant companies will continue to introduce new agents.

Will they be of the same quality as Muse or better? Will Muse be able to keep up with the competition? These are the questions being asked.

Their continued strong performance in their core business is undeniable, allowing them to invest in artificial intelligence, but at the same time, can they maintain this momentum, and can they seize market share from some competitors?

Okay, let's move on to the transaction example. Scott, let's get back to you. What is your strategy? Yes, I will use the buy option until the expiry date in December, which is about six weeks from now.

I will use a 1 :3:2 buy butterfly strategy instead of 1:2:1, because we are still seeing a significant rise in the implied volatility option premium. Therefore, using a 1: 3:2 ratio instead of 1:2:1 reduces the risk of volatility.

So, I plan to buy a call option at 640, sell three call options at 670, and then buy two options at 675. If I can achieve this at around 750, the return for risk will, in my opinion, be very rewarding.

As you know, the market is expecting a move towards the expiration of the December options, either up or down, or a bigger move, perhaps around $50. Therefore, I see the target as 670.

Again, I don't necessarily expect this slight rise to continue today or next week, but I think that over the next six weeks, as the market stabilizes, this will be a good opportunity.

Okay, I'll explain this deal in detail. Scott presents us with an unexpected option. I liked this upward-looking example in the program. Thank you, Scottie. Yes, buy the monthly call option for December.

This means he will hold this position for 42 days. So, this gives it enough time to develop, doesn't it? And to go in the direction he wants.

But let's analyze this. In the December options, Scott buys one call option at 640, sells three call options at 670, and buys two call options at 675. He pays approximately $750 as a debit value.

There is a slight change in the level of risk, but the amount you pay is your risk. If you pay $750 as a risk in this potential deal, the maximum profit is $750, right? Therefore, it is a good deal in terms of risk and return.

Now, if the execution price exceeds $670, Scott will lose a portion of this profitability, but he will still earn more than double even if the execution price exceeds $675.

So, it's more like a calculated bullish trade, where you want to sell three options at 670, but any price above this breakeven point, which is around 647.50, will make a profit.

The stock is currently trading at around $620. So, in Scott's trade, you definitely need to move upwards, as a percentage, to reach your target. I think the key here at Scott's is that he set a 42-day term for this deal, which allows us to recoup some of the losses we have recently incurred.

But Scott, I'll go over my deal quickly. I want to know your opinion about it. My deal is more negative, as I could be wrong, but it is still profitable.

I looked at the option to buy a short vertical, and I changed the duration too, Scott. I chose a monthly option on November 20th, which means only 14 days until the expiration date. It is really a short-term center.

I sell a call option outside the profit range at an execution price of 660, then I buy a call option at an execution price of 670. That is, I sell a vertical call option at an execution price of $10, neutral to bearish.

I make a profit of approximately two dollars from this deal. This is the expected profit, $200 per trade with a risk of $800, but this will raise the share price to 662, which is about $42 higher than the current share price.

What do you think of this vertical buying option?

From a probability perspective, I think the likelihood of the deal succeeding is slim over the next two weeks. What worries me, in my trading method, is the risk-to-profit ratio.

I'm betting $8, and I could win $2 if there's a big price increase.

That worries me, but I think the probability of this deal succeeding is very high. Yes, that's why I like having Scottie, the veteran trader, here on the show to present these examples, because he makes an important point, doesn't he?

We talk about this constantly. It's about trade-offs, right?

You will only make $200 from this price difference, but you have the potential that the execution price of 660 that you sell in this short vertical option will end up outside the profit range, which is what you want.

You want it to end below 660 within the next two weeks, with a probability of approximately 78% that it will end out of profit at maturity.

Therefore, a higher probability of success means you have a greater risk for a greater potential return in the short vertical option. Okay, here it is, Diane. A little negativity in the downward direction, and a little boldness on Scottie’s part in the butterfly strategy for the call option ratio.