META Shares Drop 12% Amid Heavy 720 Call Activity: Over 5,800 Contracts Traded as Investors Position for Recovery
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Options Traders Target January 2026 720 Call Despite 12.15% Drop
Meta Platforms (NASDAQ: META) plunged 12.15% to $660.31 after Q3 2025 earnings—yet options traders weren’t shying away. The January 16, 2026 720 call option saw a massive volume of 5,862 contracts traded this morning, representing 4.4% of all META options activity. What’s particularly notable: an overwhelming 89.6% of this volume was bought, and 94% came from large or professional traders. While retail made up just 6% of activity, it’s clear that institutional money is positioning aggressively, even as the stock reels from earnings fallout.
Institutional Order Flow Dominates: 94% Large-Trader Participation
This surge in call buying stands out against META’s sharp one-day selloff—down over $91 a share from the previous close. With a trade VWAP (volume-weighted average price) of $22.08 and prices ranging from $19.00 to $24.40, these options trades represent multi-million dollar notional bets. Intriguingly, 94% of orders are classified as large/pro, suggesting that funds or sophisticated participants see either a bargain in calls, or an opportunity for upside as volatility spikes around this event.
| Contract | Volume | Percent of Total Option Volume | Percent Bought | Percent Large/Pro | Trade VWAP | VW Implied Volatility | Change in IV (%) | Open Interest |
|---|---|---|---|---|---|---|---|---|
| Jan-16-26 720 Call | 5,862 | 4.4% | 89.6% | 94% | $22.08 | 34.6 | -7.2% | 2,466* |
*Open interest updated only at start of trading day; today’s activity won’t appear until tomorrow’s data.
Volatility Shifts: Implied Volatility Down 7.2%, but Risk Appetite Evident
The implied volatility (IV) on this contract saw a meaningful drop, falling 7.2% from the previous day’s close (now 34.6 vs. 37.3). This typically points to declining uncertainty or demand for hedging post-earnings, even as share price turbulence persists. However, large call buying suggests at least some traders are taking advantage of lower premiums or betting that META’s rebound could be sharper than the market currently prices in. Today’s IV is also only slightly above the session low, further underlining possible premium compression despite elevated realized volatility.
Stock Drops on Tax Hit, but Revenue Grows 26%—Is Sentiment Too Bearish?
Today’s option activity follows META’s third quarter results, which included a one-time, non-cash tax charge of $15.93 billion that drove reported net income and EPS sharply lower. Adjusting for this, operational trends are robust: revenue jumped 26% year-over-year to $51.24 billion, with strong growth in user engagement and ad prices. But cost and tax pressures have driven headline profit figures down, fueling today’s steep share price reaction. Option traders might see this as an overreaction or are positioning for stabilization and a gradual climb into 2026.
Takeaway: Professional Bulls Bet on META’s Rebound as Market Digests Tax Overhang
Today’s high-volume call activity, particularly from large, professional participants, stands out against META’s double-digit percentage decline. While implied volatility has compressed, possibly making call options more attractive, these trades do require a substantial rebound for profitability (a move from $660 to above $742, plus premium paid, by Jan 2026). For readers, this is a signal that—at least for now—institutional traders may view the post-earnings selloff as excessive, or at minimum, an opportunity for strategic positioning.
What’s Next? Watch tomorrow’s open interest figures to see if these trades represent new bullish positioning or short-covering, and monitor price action as the market absorbs both the Q3 numbers and forward-looking tax/expense guidance. Either way, the size and skew of today’s order flow merit close attention for anyone following META into the next quarter.
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