Zillow Group, Inc. (Z) Buyout Buzz Excites Call Buyers

Zillow Group Inc (NASDAQ:Z) is muscling higher on buyout buzz

Jun 19, 2015 at 3:14 PM
facebook twitter linkedin


Zillow Group Inc (NASDAQ:Z) is sharply higher this afternoon, amid unconfirmed rumors the real estate company may be a buyout target. Among the potential suitors are Google Inc (NASDAQ:GOOGL), and possibly even Facebook Inc (NASDAQ:FB) -- following glowing comments from Z CEO Spencer Rascoff. This is likely welcome news for recent call buyers -- of which there have been many.

Specifically, during the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Z has racked up a call/put volume ratio of 2.36. Not only does this reading indicate more than two calls have been bought to open for every put, it also ranks higher than nine-tenths of comparable metrics from the past year.

Not everyone is so convinced about Z's prospects. For one, over 36% of the stock's float is sold short -- representing more than 12 sessions' worth of trading activity, at typical volumes. In fact, it's possible some of today's call buyers -- especially those initiating positions at out-of-the-money strikes -- may be short sellers attempting to hedge their bets. For another, 80% of covering analysts consider the shares worthy of a tepid "hold" rating.

From a technical perspective, this skepticism seems justifiable. Despite Zillow Group Inc's (NASDAQ:Z) 4.1% rally this afternoon to trade at $90.52, the shares have plunged 45% since hitting an all-time high of $164.90 last July. What's more, today's gains are being contained by Z's descending 32-day moving average.
 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners