Zillow Group, Inc. Options Volume Picks Up After News Corp Settlement

Traders are selling premium on Zillow Group, Inc. - Class A (NASDAQ:ZG) options today

Jun 7, 2016 at 12:23 PM
facebook X logo linkedin

Historically speaking, Zillow Group, Inc. - Class A (NASDAQ:ZG) options traders have targeted calls over puts. This is evidenced by the stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 2.00. This affinity for ZG call options is continuing today following a major legal settlement, though it doesn't appear traders are taking a bullish stance. 

By the numbers, ZG call volume is running in the 100th percentile of its annual range, with almost 4,200 contracts crossing -- or 29 times the average intraday pace. The most popular option is the January 2017 35-strike call, but it looks like traders are selling to open positions here, betting on the $35 level to act as a technical ceiling through the rest of this year. 

Interestingly, this isn't the best time to sell premium on ZG options. This is according the stock's Schaeffer's Volatility Index (SVI) of 51%, which ranks in the 7th annual percentile. In other words, the options market is pricing in low volatility expectations at the moment -- not what a premium seller wants to hear. 

Outside the options pits, ZG has been heavily shorted. In fact, almost 7% of the stock's float is sold short. Moreover, at ZG's average pace of trading, it would take these bears nine sessions to cover their positions -- which many are beginning to do. Over the last reporting period, short interest on ZG fell by 11%. 

Zillow Group, Inc. - Class A (NASDAQ:ZG) has been climbing the charts in recent months, nearly doubling in value since its two-year low of $16.46 in February. Today, ZG stock is up 6.4% at $32.76 -- putting the shares just below their annual high of $35.47 -- on news of a settlement with News Corp (NASDAQ:NWSA). As a result, the stock got upgraded to "equal weight" from "underweight" at Barclays, which was also one of three brokerage firms to raise its price target on ZG, setting it at $32. 

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI