Two significant volatility events this week have created an opportunity to sell premium. Meta Platforms reported Q2 2026 results after market close yesterday, and the reaction was decisively negative — the stock is dropping roughly 10% in premarket trading. Separately, the South Korean equity market has been in freefall this week, with the KOSPI posting its worst single-day decline in approximately five months, dragging the iShares MSCI South Korea ETF (EWY) into bear-market territory.
Transaction Details:
- Meta Platforms (META) — Short Put: Sell 1x Oct 2026 $550 Strike Put
- iShares MSCI South Korea ETF (EWY) — Short Put: Sell 1x Oct 2026 $150 Strike Put (small starter position)
Meta Platforms — Earnings Overview:
Meta reported Q2 2026 revenue of $60.8 billion, beating the analyst consensus of $60.2 billion and representing a 28% year-over-year increase. The top-line number was strong, but virtually everything else disappointed. Earnings per share came in at $6.18, well below the $7.22 consensus estimate. Net income declined approximately 14% year-over-year, and the headline that rattled investors most was free cash flow, which cratered 91% to just $784 million from $8.7 billion a year ago. The company maintained its full-year 2026 capital expenditure guidance of $115–$135 billion, lifting the lower end of the range to $130 billion — a clear signal that the AI infrastructure buildout is accelerating, not slowing. The Q3 revenue forecast also came in lighter than Wall Street had hoped for, compounding the negative reaction.
If the stock recovers, we keep the full premium. If it continues to decline and we are assigned, we enter a position in Meta at a significantly lower cost basis than the current market price.
iShares MSCI South Korea ETF (EWY) — Market Context:
South Korean equities have been under severe pressure this week. The KOSPI index dropped nearly 11% on Tuesday, July 28, marking its worst single session in roughly five months. The selloff was concentrated in semiconductor and chip-related stocks, which had been the primary drivers of the market's strong run earlier in 2025 and into early 2026. Seoul's equity market has lost approximately $2.18 trillion in value across consecutive sessions of heavy selling. The iShares MSCI South Korea ETF (EWY) has now declined roughly 28% from its June 18 peak, officially entering bear-market territory by the conventional 20% threshold.
We are initiating a small starter position here — a single October put contract on EWY. The rationale is straightforward: volatility in Korean equities has spiked to levels that make selling premium compelling, and we want to capture some of that elevated option premium without committing significant capital. This is deliberately sized as a small, exploratory position. If the selloff extends further and premiums remain attractive, we may look to increase the position size at a later date.
Both positions will be added to our virtual portfolio during the opening today. These are options positions, not direct stock purchases, and they will be tracked accordingly with the premium collected and mark-to-market valuations updated on an ongoing basis.
Disclosure: These are simulated positions for nobelselect.com research purposes. Not financial advice.