Selling cash-secured puts on META

Selling a put transfers the downside between $700 and zero to you, and you are paid $19.05 per share for taking it. "Cash-secured" simply means you hold the $70,000 required to buy the shares instead of leaning on margin. Same position, honest denominator.

At October 30, 2026: above $700 the put expires worthless and you keep $1,905 — that is the maximum this trade can make, $1,905. Below it you're assigned 100 shares at $700, with an effective cost basis of $680.95 once the credit is applied. That is 9.4% below where META trades today.

The engine puts the probability of keeping the full credit at 75% on META at $751.66 with 48% ATM implied vol on the Oct 30 expiry. High win rate, capped payoff, uncapped-to-zero loss — the risk profile of every short-premium trade. It is not free money; it is a rent cheque for underwriting someone else's insurance.

Max loss is $68,095 — the strike, less the credit, times 100, if META goes to zero. That number is not theoretical on single names; it is simply unlikely. Size the position against that figure, not against the premium.

The real-world failure mode is a gap, and META has the catalysts for one: earnings (capex guidance is the swing factor) and ad-market datapoints. A put sold 6.9% out of the money offers no protection at all against a move twice that size overnight.

Liquidity is a risk, not a convenience. The moment you most want out of a short-premium position is the moment the spread is widest, and the exit price you modelled at mid will not be available.

The notional is the story. One contract controls a five-figure position, so a covered call here is not a starter trade and a cash-secured put ties up more capital than most retail accounts want in one name. What you get for it is a genuinely elevated between-print premium — Meta implies more vol than it realizes for most of the quarter and then makes up the difference in a single session.

META's Oct 30 strikes are $10 apart near the money (1.33% of spot). That is a coarse ladder: one rung is a large fraction of the implied move, so precision on the short strike is an illusion. 23k contracts of open interest on Oct 30 is workable around the money and thin in the wings — width costs more here than the ladder suggests. 42 strikes on that expiry — 95% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Liquid, but the dollar-wide strikes near the money mean spreads at retail width need several rungs — check the ladder before assuming a $5 wing exists.

Skew is inverted: the 25-delta CALL implies 5.1% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is backwardated — Oct 30 implies 2.5% MORE vol than the following month. That is the signature of a dated event inside the front month, and it is the strongest argument for picking the expiry that sits behind it.

At 48% ATM implied vol, the Oct 30 options are pricing a one-standard-deviation move of $108.06 over 33 days — roughly −14.4% to +14.4%, or $643.6 to $859.72. A short-premium structure here is a bet that 14.4% over 33 days is more than META will actually use. That is the thesis, stated honestly.

The mistake this name punishes hardest: Underestimating position size because the delta looked small. On a name at this price, a single condor's max loss is a real fraction of a retail account.