Interesting news today with the merger of Zillow and Trulia (TRLA):
The combination of companies is still showing zero profits.
Either way, a free gift of a rally here has Zillow stretched beyond "trend" so I would suggest walking away or writing calls for as long as possible "AT THE MONEY" to capture as much premium as possible.
1 year call premiums might be 20% for at the money options and I think that is a decent return.
Cheers.
Tim 4:17PM EST 7/24/2014 145.76 last
Comments
timwest
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Zillow was a great exit on this news - the stock is now down to 108 (37 pts or 23%, roughly what I was concerned would happen) and is trading down after reporting earnings. I think there are some support levels that will hold down around the Cup&handle accumulation levels, but I'm going to watch the drop carefully for the next three days. 10/6/2014 4:30PM EST
NJgolfer
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not sure how you are drawing some of the earning triangles. seems to me the one on 11/5 should gone from 11/5 - 11/7 and the one on 2/12 should have gone from 2/12 to 2/14 as examples. interested to learn why you drew them as you did. thanks
timwest
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Hello NJgolfer - SO sorry I didn't see your question. I tried to do 1-year apart as my general theory on how to draw the lines between the triangles. That just made intuitive sense to me to use 1-year apart on these. It's an entirely new methodology that I have found thanks to TradingView's charting capability. Thanks for your question. Did you exit your Zillow up there near $145? Even the WRITE 20% COVERED CALLS would have worked out well.
timwest
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If you hover your mouse over the trendline - you will see that they are 252-253 days apart, which is 1-year (roughly 255 trading days to a market year).