Betting Big on Real Estate: Investor's Lucrative Zillow Options Play

investing.com:

Quiver Quantitative — In a strategic maneuver, a savvy investor in Zillow (NASDAQ:ZG) has lucratively capitalized on the company's recent stock surge, realizing approximately $39 million in profits from a bullish options bet initiated in late October. This investor initially acquired call options, granting the right to buy around 3.4 million Zillow shares at a strike price of $45 each. The bet paid off handsomely as Zillow's stock experienced a 60% jump in the last two months of the year, partly fueled by a broader rally in the residential real estate sector amid signs that mortgage rates might have reached their peak.

As Zillow's shares soared from about $38 to $58, the investor seized the opportunity to sell the $45 call options, benefiting from a remarkable 525% gain. Following this lucrative exit, the investor reinvested more than half of the profits into a new bullish position. This involved purchasing call options expiring in May, which would allow them to buy an additional 5.1 million shares at $65 each. This new bet implies a confident forecast of a further 12% rise in Zillow's Class C shares from their current level around $58.

Market Overview: -Zillow soars, mirroring broader housing rally, fueled by belief mortgage rates have peaked. -Fed rate cuts and potential mortgage cost dip eyed as catalysts for continued home buying. -Options activity surges on Zillow, reflecting heightened bullish sentiment on real estate.

Key Points: -Zillow investor cashes in on $39 million profit from well-timed bullish call options bet. -Options, allowing purchase of 3.4 million shares at $45, skyrocketed on Zillow's 60% surge. -Investor exits with substantial gain but doubles down, buying new calls for 5.1 million shares at $65.