Wednesday, August 28, 2019

YELP - Are call buyers right?

A reader pointed out this call and I can see it could be compelling.  Are the call buyers, who are willing to pay $1.10 for the right to buy YELP at $39, which is quite a high price, correct that YELP will go up that high? .  The call details are below.

Many users of calls to boost income could buy into this trade but caution is important.  I cannot tell you how many people get sucked into this type of trade and the stock tanks and you are stuck.

YELP's price may or may not tank, and you may be called away for a juicy over 20% gain after all YELP's 52 week high is $52.50  Then again, if YELP does tank, you have only the premium which will probably not make up for the capital loss.

Traders be careful.

M* MoneyMadam