I Just Did A Spit Take

Hi Shoppers,

 

Everyone and their mother is moving to Florida, it seems.

 

(Heck, even Option Pit Head Income Trader Bill Griffo decamped for Tampa last year — and he is looking VERY relaxed on Zoom calls these days.)

 

My husband, Scott, and I have been eyeing Florida real estate for a few years now, dreaming of retiring in the sunshine with a pool and maybe a boat.

 

We considered a not-too-long-ago visit to Sarasota, Siesta Key, Naples and Marco Island an “investigation” of where we could see ourselves living in the future.

 

Northwest Florida, or the Redneck Riviera as they call it, is fabulous for families, too.

 

Our friends bought a lot on Keewaydin Island. They are trying to convince us and other friends to join them — but Scott likes running water and electricity.

 

What is going on in the real estate market down there has got to be criminal. I know the Florida market has a reputation for major hills and valleys … but this is crazy!

 

Check out the price history of these three properties, most notably the dates and price swings:

 

 

 

What is happening here? I realize people buy and flip properties — but $750,000 to a million dollars more in a month or less!?

 

How can these realtors be doing their due diligence? 

 

This has the makings of a John Grisham novel!

 

If anyone has any insight into this, I would love to hear it.

 

Anyway, there’s a reason I’m talking about real estate that goes beyond absolutely wild price swings in the Sunshine State …

 

I am seeing a very interesting candlestick in Zillow (Ticker: Z) — and it has given me not one but TWO trade ideas!

 

Zillow Prices

 

I spotted a really pretty hammer in Z. Then I see they had earnings last night and the stock traded up over $6 already to $127.74. That’s up 5%.

 

But the stock traded as high as $142.80 as recently as April 24.

 

 

Since the stock has already moved so much, I do not have an option recommendation …

 

But I DO recommend jumping onto the long side of Z today with this higher opening.

 

I think it can trade back up to $146.

 

I am seeing another hammer candlestick in Teladoc (Ticker: TDOC) after a long downtrend that started on Feb. 16. The stock has come down from $308 to closing yesterday at $158.37.

 

If TDOC opens higher this morning, I would like to buy a call spread in the May21 cycle.

 

 

I like buying 162.50 calls with an implied volatility of 45.25 and selling the 182.50 with an implied volatility of 49.98.

 

These markets are wide and there isn’t a ton of volume, but I would try and buy the May21 162.50/182.50 call spread and pay up to $3.80.

 

 

I would take my loss on this spread if it trades down to $2.60. I would begin to take profits in the $6 area.

 

Trade Reviews

 

      • On Saturday, May 1, I recommended a put spread in SPY if it opened lower on Monday. Unfortunately, SPY did not open lower — but, damn, it traded way lower on Tuesday taking that spread up 90%. Oh well. There will always be other trading opportunities. Nice to be right in the long run.
      • On Monday, May 3, I recommended a put spread in Philip Morris (Ticker: PM) if the stock opened lower that morning. It opened higher, so no trade.


Circling Back

 

One more note on the real estate craziness I talked about up top — we will not be retiring anytime soon with those insane prices!

 

But if you have any insight into the craziness of the Florida real estate market — or questions about options trading! — email me at email me licia@optionpit.com

 

Thanks for Reading … See You Next Tuesday!

 

Licia Leslie

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