Meta Options Volume Spikes as AI Agent Muse Drives Rally

Investors are piling into Meta options at a rate that signals a major shift in how the market views the company’s AI prospects. Trading volume on Monday reached roughly 4.5 times the 30-day average, with nearly $3.9 billion in total premium exchanged. This surge coincides with a 12% jump in the stock price, bringing it within 7% of its all-time high.

The momentum follows the launch of Muse, a personal AI assistant that has quickly climbed app store charts. According to data cited by CNBC, the tool accumulated 730,000 downloads in its first five days. Traders appear to be betting that this consumer-facing product will translate into sustained revenue growth, despite the tool being less than two weeks old.

Traders favor bullish bets

The options flow shows a clear preference for upside potential. More than twice as many call contracts were purchased compared to put contracts, and seven of the ten largest trades were either bullish or neutral. SpotGamma analysts noted that over $1.3 billion in call premium was initiated by buyers, suggesting strong confidence in further price increases.

However, the trade is not entirely one-sided. About $1.1 billion in premium was tied to selling, indicating that some participants are hedging their gains. A significant portion of the activity involved zero-day-to-expiry options, which are high-risk instruments that expire immediately, reflecting a speculative environment rather than long-term positioning.

Infrastructure plans support AI narrative

Beyond the software, Meta announced plans to build a subsea cable named Petal to transmit data across the Atlantic. This infrastructure investment addresses a critical bottleneck for AI services: the speed and reliability of data transfer. By controlling its own connection, Meta aims to reduce latency for its global user base.

The catch is that such infrastructure projects are capital-intensive and take years to yield returns. While the cable supports the technical feasibility of Muse’s performance, it adds to the company’s expenditure burden. Investors must weigh the immediate hype around the AI app against the long-term costs of building out the necessary network backbone.

Hedging signals caution

Despite the bullish mood, large institutional traders are taking protective positions. The largest single trade of the session appeared to be a net short position of around $20 million. This trade centered on a call spread that profits if Meta’s stock slips below $740, suggesting that some big players are preparing for a potential correction.

This hedging activity indicates that while the market is excited about Muse, it is not entirely convinced of a straight-line path to higher prices. The divergence between retail enthusiasm and institutional caution creates a volatile trading environment where rapid reversals are possible. Investors should monitor whether the download numbers translate into engagement and retention over the coming weeks.