EARN25

Options Bulls Target Zoom Stock After Upgrade

Calls are flying off the shelves after the upgrade

Deputy Editor
Oct 22, 2021 at 10:51 AM
facebook X logo linkedin


J.P. Morgan Securities upgraded Zoom Video Communications Inc (NASDAQ: ZM) to "overweight" from "neutral," saying long-term adoption of the pandemic-era communications tool in businesses will help accelerate future growth. The firm noted that ZM will likely bottom out this quarter, and that the stock already reflects a slowdown in remote video communication as pandemic-related safety measures continue to ease.

The analyst joins a split brokerage bunch. Coming into today, nine of the 18 in coverage considered the stock a "buy" or better, while the other nine recommended a tepid "hold." Meanwhile, the 12-month consensus price target of $369.43 is a 30.5% premium to the equity's current level.

Call traders are blasting ZM following the upgrade. In the first hour of trading, 37,000 calls have exchanged hands, which is three times the intraday average and almost four times the amount of puts traded so far. The two most popular contacts are the weekly 10/22 285- and 290-calls, with new positions are being opened at each.

Last seen up 3.8% to trade at $285.26, Zoom stock has more than halved since its pandemic-era peak of $588.84, achieved on Oct. 19, 2020. The stock has been on the rise in the last couple weeks, however, since its 20-day moving average pushed it to an annual low of $250.11 on Oct. 6. The security has since toppled this trendline, though it still suffers a year-to-date deficit of 18.5%. 

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!