TOL Bearish inclined naked calls - 19 Feb expiryFebruary's Secondary Trade
This trade is slightly riskier and is the opposite of the general market movement (bullish).
Residential Construction as a category has done generally well through the pandemic, at this point most of the companies in this sector have a very similar chart movement (Downward range) which is great as it shows a level of predictability in price movement.
Toll brothers is US's leading builder of luxury home. They have done well in the pandemic with their Q4 earnings breaking past estimates.
For Q4 the company's home sales revenue was up 9% year over year with home building deliveries growing 10%. Despite the positive results price is currently ranging with no spikes.
I'm positioning a neutral to bearish outlook as I expect the vaccination and the world getting used to the pandemic to see trading cash flow towards larger growth opportunities in COVID-19 impact sectors that are super beaten down and will see price climbing up
Sold 40 CALLs @ 0.6, Strike 49
BP block: 17k
Max gain est: $2374