Meta Earnings: Options Price a Smaller Move Than Meta Usually Makes
Author: Koen Hoorelbeke, Investment and Options Strategist
Date: October 20, 2026
Summary
Meta Platforms, Inc. is set to release its third-quarter earnings report on October 21, 2026. Historically, Meta's shares have shown significant volatility following earnings announcements, with movements exceeding 7.5% in five of the last eight reports. However, current options pricing indicates that the market expects a smaller move of approximately 7.1% this time around.
Historical Performance
Since October 2024, Meta has reported earnings eight times, resulting in an equal split between positive and negative movements. The median price movement has been around 8.3%, while the average is slightly lower at 7.4%, influenced by a few less volatile reports. The largest drop recorded was 11.3% in October 2025.
Options Market Expectations
The options market provides insights into expected price movements through the pricing of straddles, which involve buying both call and put options at the same strike price. For the upcoming report, the straddle price indicates a market expectation of a 7.1% move, suggesting a potential trading range between $655 and $755.
Comparison of Expected Moves
While the options market anticipates a 7.1% move, Meta's historical average suggests a typical move of about 8.3%. This discrepancy may indicate a market expectation of a calmer earnings report this time.
Options Strategies
The article discusses two illustrative options strategies based on the expected price movement:
1. Long Straddle
This strategy involves buying both a call and a put option at the 705 strike price. The maximum risk is the total premium paid, approximately $5,017.50 per contract, with unlimited profit potential if the stock moves significantly in either direction.
2. Iron Butterfly
This strategy entails selling the 705 call and put options while buying cheaper protection on either side (the 655 put and 755 call). The maximum risk is limited to about $1,492.50 per contract, while the maximum profit is around $3,507.50 if the stock remains close to the strike price.
Conclusion
Meta's historical volatility suggests that significant price movements are common following earnings reports. However, the current options pricing indicates a more subdued expectation for the upcoming report. Investors should consider their risk tolerance and market outlook when deciding on strategies, as both the long straddle and iron butterfly have distinct risk profiles and potential outcomes.
Final Thoughts
As the earnings report approaches, the market's expectations may shift. Investors should remain vigilant and prepared for potential volatility, keeping in mind that options trading carries inherent risks.