Zillow Options Trading Insights: Attractive Strategies Ahead

Investors eye Zillow Group's new operational strategies as options trading reveals significant potential. Engaging in put and call contracts could offer appealing returns in the upcoming months.

Date: 11-04-2025

AI Rating: 7

Zillow Group Inc (Z) Options Analysis
Recent trading activity for options related to Zillow Group Inc has attracted investor attention. Notably, a put contract with a $60 strike price offers a commitment to purchase the stock at that price, potentially lowering the cost basis to $56.05 after capturing the premium. The premium of $3.95 reinforces a favorable alternative for interested investors, especially given the strike represents a mere 1% discount to the current market price.

This option's current odds of expiring worthless stand at 57%, indicating a decent likelihood of realization. Should it expire worthless, investors could achieve a 49.04% annualized return on cash commitment, a statistic that indicates solid potential for strategic option plays.

On the call side, the $62 strike price supported by a $4.25 bid presents an opportunity as a covered call. If Z shares climb and the stock is called away, investors could see returns close to 9.14%. With a 48% chance of the call expiry being worthless, investors would keep both shares and premium, lending to an additional 52.16% in annualized returns.

These strategies highlight high implied volatilities (69% for puts and 68% for calls), suggesting traders anticipate considerable price movements. However, it's worth noting the covariance against the historical volatility at 50% might prompt cautious optimism, as market movements could either amplify gains or accentuate risks.

In summary, Zillow's recent option activity underscores its potential to enhance returns through strategic positioning. Investors might weigh these options against firm fundamentals and market conditions in the upcoming months for informed decision-making.

Stocks: Z