Is the best way to invest to just “buy and hold”? - P.Y., Morgantown, West VirginiaĪ. Anyone interested in finding out more about option-based strategies or for a weekly option and volatility newsletter can visit the Options and Volatility Newsletter website.Q. I would use a meaningful break past the all-time intra-day high of $181.50 as a stop out point to close the position from a risk standpoint.Īs of this writing, Tim Biggam did not hold a position in any of the aforementioned securities. It is also above the all-time closing high of $174.83. The short $180 strike price provides a 9.3% upside cushion to the $164.69 closing price of ZM stock. The maximum gain on the trade is $170 per spread with maximum risk of $3.30 per spread. Sell the ZM June $180/$185 call spread for $1.70 net credit. It is even more important given that earnings are due June 2, which could increase volatility in Zoom. This is a safer way to take a short position in ZM stock in place of shorting the shares outright. So to position for a pullback in the stock using a defined risk bear call spread makes sense. This favors selling strategies when constructing trades. Option implied volatility (IV) is still high in Zoom. ZM stock is trading at a big premium to the 50-day moving average, which has led to pullbacks to that average in the past. The MACD also neared recent highs before softening as well. Its Bollinger Percent B approached 1o0, then headed down. ZM reached overbought readings on a 9-day RSI basis before turning lower. The technicals are finally flashing red for Zoom stock. We all know the usual outcome when you go against the likes of Facebook, Microsoft and Alphabet. This threat of increased competition by industry giants at reduced pricing will undoubtedly serve to slow growth and lessen margins for Zoom. Sanders goes on to note that Google will be giving away the newly launched Meet video platform for free. He notes that all three competitors have seen upticks in adoption of their platforms over the past several weeks. InvestorPlace contributor Patrick Sanders took a deep dive on the competition in his May 4 analysis. 7 Financial Stocks with Dependable Dividends
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