The more I look at the YELP candlestick chart the more I feel YELP is going down. Take a look at the post “YELP Naked Call.” I sold these 10 contracts today for the same reason. I feel YELP is in a “Raising Wedge” pattern which normally means a reversal. Yelp has been going up! If this is a true “Rising Wedge” the stock should reverse and go down a little. I believe so strongly that YELP is going down that I’m making a trade with a Risk Factor of 5. The stock is at $25.18 and I sold a Naked Call with the Strike Price of $25. I am $.18 In-the-Money. This Call expires this Friday. If I’m wrong on the direction, I’ll have to do a Roll Out. I really don’t want to own the stock so I will probably not cover this Call. I’m hoping the stock will be below $25 at the close on Friday. Here’s the sell order:
Sell to Open 10 YELP 5/27/16 $25 C @ $.65 (+$650)
I have 2 Naked Calls on YELP. Both expiring this Friday. One $25.50 and the other $25.
I’ll be watching YELP very closely!
Steve
The Options Coach