Meta (META) Options Signal $700 Call Contention: Bullish AI Catalysts vs. Near-Term Volatility Risks

• Options data shows heavy call open interest at $690–$700 strikes for Friday and next Friday, with puts clustering at $600–$630.
• Block trades suggest institutional positioning in January 2026 calls and November 2025 calls, hinting at strategic hedging or distribution.
• Technical indicators flag overbought RSI (70.9) and a bearish MACD crossover, but AI-driven news could override near-term jitters.

Here’s the thing: Meta’s options market is locked in a tug-of-war between AI optimism and metaverse skepticism. Call open interest at the $700 level for next Friday (META20251219C700) is surging, while puts at $600 (META20251219P600) hint at downside caution. The 0.58 put/call ratio (call dominance) suggests bulls are in control—but technicals and block trades tell a more nuanced story.

The Call/Put Imbalance and Whale Moves: A Tale of Two Timeframes

Let’s start with the options data. This Friday’s chain shows heavy call interest at $670–$700, with the $700 strike (OI: 8,883) acting as a psychological magnet. But next Friday’s $700 call (OI: 18,395) is even more telling—it’s the most contested strike, implying a potential price target for AI-driven momentum. Puts, meanwhile, cluster at $600–$630, with the $600 strike (OI: 13,202) as a key support level to watch.

Block trades add intrigue. The META20260116C770 call (expiring Jan 16, 2026) saw a $2.37M block trade, hinting at long-term bullish positioning. But the sell calls at META20251121C780 and META20251121C800 (totaling $1.86M) suggest hedging or profit-taking ahead of expiration. Think of it like a chess game: bulls are stacking chips at $700+, while bears are bracing for a drop to $600.

AI Hype vs. Metaverse Headwinds: Which Story Wins?

The news flow is a mixed bag. Morgan Stanley’s Brian Nowak is bullish on Meta’s AI moat, citing the “Avocado” LLM and a $1,000 price target. That’s music to call buyers’ ears. But the VR price hike and $73B Reality Labs loss? That’s a red flag for near-term volatility. Investors love Meta’s AI narrative, but the metaverse’s bleeding cash could drag shares lower if earnings miss expectations.

Here’s the rub: the market is pricing in AI optimism but hedging against metaverse disappointments. The $651.77 current price is dancing between 30D support ($608.65) and 200D resistance ($747.25). If Avocado delivers, the $700 calls could ignite. If VR cuts hit nerves, the $600–$630 puts might dominate.

Trade Ideas: Calls for the Bold, Puts for the Pragmatic

For options players, the META20251219C700 call (next Friday’s $700 strike) is a high-conviction play if Meta breaks above its 200D MA ($671.29). Entry near $655–$657 (above the 20D EMA) with a target at $700+ could capitalize on AI hype. Alternatively, a bear put spread using the $630 (META20251219P630) and $600 (META20251219P600) strikes makes sense if the stock dips below Bollinger Band’s middle line ($628.45).

Stock traders should watch $640.795 (intraday low) as a critical support. If it holds, consider entries near $635–$640 with a first target at $660 (Bollinger Band middle line + 30D MA). A break above $675 would validate the call-heavy thesis, while a drop below $610 (30D support) could trigger a deeper correction.

Volatility on the Horizon: Balancing the AI Dream and the Metaverse Nightmare

The next two weeks will test Meta’s resolve. The $700 call contention and AI narrative suggest a breakout is possible—but Reality Labs’ losses and VR pricing moves could create headwinds. Traders need to balance conviction in the AI story with caution around near-term earnings and metaverse updates. Either way, the options market has already priced in a wild ride. The question is: who’s ready to ride it?