Folks, I’m truly excited to bring a fresh look to the concept behind virtual reality stocks to buy. In this case, the focus will be entirely on the math and specifically the math of the options market.
You’re going to expect me to lecture you on the virtues of virtual reality stocks to buy? I can do that if you’d like. Some market research firm says this target, another says that target. Who cares, honestly? We’re here because you want to get rich quick with equity market opportunities.
We’re going to do just that. Buckle up for a mind-blowing ride into virtual reality stocks to buy.
Meta Platforms (META)
News flash, neither Meta Platforms (NASDAQ:META) nor the other virtual reality stocks to buy on this list will get you rich if you peddle around with buying a few shares here and there. To make money, you need money – that’s just the bottom line. And if you’re a little short, that’s what options are for.
Specifically, I’m looking at the META Jan 17 ’25 40.00 Call. Even with the dramatic price increase on Thursday, the math looks compelling:
- The option was last priced at $440.99. Multiplied by 100 shares, that comes out to $44,099.
- With a $40 strike price, exercising the contract (multiplied by 100 shares) costs $4,000.
- Therefore, the contract total value (with exercising) is $48,099.
Here’s where things get really interesting. Currently, analysts project META stock to hit $528.54 over the next 12 months. Further, the high-side target lands at $575. Now, these targets presumably should materialize in February but let’s push it up a month.
If META hits the average analysts price, you’re looking at $52,854 (from the $528.54 target multiplied by 100 shares). So, your profit would be $4,755. At the highest target, it would be $9,401.
Microsoft (MSFT)
As a relevant but boring technology juggernaut, I typically don’t get too excited about Microsoft (NASDAQ:MSFT). However, I looked at the options market, did some math and I changed my mind. I’m extremely excited about MSFT as one of the virtual reality stocks to buy.
So, I’m looking at the MSFT Jan 17 ’25 200.00 Call. Yes, MSFT closed Thursday at $406.56 so we’re going to pay a ridiculous premium for this contract. But let’s walk through the math:
- The option was last priced at $213.68. Multiplied by 100 shares, that comes out to $21,368.
- With a $200 strike price, exercising the contract (multiplied by 100 shares) costs $20,000.
- Therefore, the contract total value is $41,368.
So, let’s get to the interesting part. Over the next 12 months, analysts project that on average, MSFT will reach $469.45. The high-side target calls for $600. And the lowest price target sits at a relatively high $440. Let’s assume these targets come true in January 2025 than in February.
If so, even at the lowest price, you would be profitable. At $440, your 100 shares would be worth $44,000. Subtract that from $41,368 and you have $2,632. Wow!
Advanced Micro Devices (AMD)
To be sure, the options contracts of the top two virtual reality stocks to buy are mighty expensive. I’m not going to sugarcoat this – so is Advanced Micro Devices (NASDAQ:AMD). However, the cost savings are tremendous.
Let’s again look at January of next year, specifically the AMD Jan 17 ’25 55.00 Call. Again, we’re deep in the money, which seems unnecessarily risky. We just need to do the math:
- The option was last priced at $124.78. Multiplied by 100 shares, that comes out to $12,478.
- With a $55 strike price, exercising the contract (multiplied by 100 shares) costs $5,500.
- Therefore, the contract total value is $17,978.
Okay, let’s bring out the analysts’ price targets! On average, Wall Street’s experts are calling for AMD stock to reach $194.94. Moreover, the high-side target lands at $270. So, with the leverage of 100 shares, your gross investment value ranges between $19,494 and $27,000.
Assuming the 12-month targets come true one month early, you’re looking at a profit of $1,516 if the average hits or $9,022 if the optimists win out.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
