$META & $ARM Options Trades: Big Wins From Breakouts & Earnings!

Author: Sandra Stone | May 07, 2024 09:12am

On Friday May 3rd, Live on Benzinga TV, Sandra Stone with Trading Made Simple LLC and Zunaid Soleman were discussing potential trade ideas.  

Trade 1: Breakout on Meta Platforms, Inc. (NASDAQ:META)

• Reason: The price of Meta's stock key level was 450.00 which broke a key resistance level on the chart, indicating a potential bullish trend and an opportunity for price appreciation. We took a May 10th 452.50 CALL OPTION for $1.42.  
• Profit Possibilities: If the breakout is genuine, the stock price could continue to rise, offering unlimited potential profits.
• Risk Involved: Breakouts can be false signals, and the price could fall back below the support resistance level of 450.00. A stop-loss order for 25% below the breakout point can help limit potential losses. 
• Results:  On Monday May 6 $META continued to break out. The stock reached $465.68. The CALL OPTION reached $8.30. A gain of 484% Profit. 

Trade 2: Earnings Event Arm Holdings Plc (NASDAQ:ARM)

• Reason: $ARM was about to report its quarterly earnings. Depending on expectations, the stock price could react significantly to the news. A review of the last earnings report showed a significant rise after the earnings event. We took a May 10th 119/120 CALL DEBIT SPREAD for .13.  This is a risk defined trade. 
• Profit Possibilities: If the company reports better-than-expected earnings, the stock price could surge, offering potential profits up to $87.00.
• Risk Involved: Earnings reports can be unpredictable, and the stock price might not react as anticipated. Volatility leading up to and after the event can also be high. Total risk was $13 a contract.  
• Results: On Monday May 6 $ARM rose to $106.98 and the CALL DEBIT SPREAD reached $21.00 for a gain of 61.50% Profit

Disclaimer: Past performance does not guarantee future returns. Trading involves risk. This is not financial advice. Always do your own research before making any investment decisions. Consider your risk tolerance and only invest what you can afford to lose.

Sandra is live on Benzinga Fridays at 11:30am EST.  She can be reached at https://tradingmadesimple.org, X: https://twitter.com/Options_Sandy and 714-202-7361 each trading day. 

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.

Posted In: ARM META