Trade Alert – (ZM) October 27, 2025 – BUY

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

 

Tech Alert – Zoom Video Communications, Inc. (ZM) – BUY

Buy the Zoom Communications (ZM) November 2025 $72.50-$77.50 in-the-money vertical bull call debit spread at $4.50 or best

 

Opening Trade

10-27-2025

expiration date: November 21, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 25 contracts

Zoom (ZM) holds a hallowed place in the best-performing Mad Hedge recommendations of all time. After we recommended to stock pre-pandemic, the stock went ballistic, increasing in value ten times, eventually reaching $600 a share.  After that, (ZM) died and didn’t move for four years, eventually plunging to $55 a share.

It looks like Zoom is finally reawakening from its long slumber. The technicals are hinting at a long-term risk reversal. You also may have noticed that you can hardly get through a day without attending one, if not several, Zoom meetings.

Investors are noticing.

Zoom has been ignored for so long that the shares have fallen to 14X earnings. Some 30% of the company is now all cash, and if you strip that out, Zoom is actually selling at 11X earnings. In an expensive world, that is very cheap.

Zoom Communications, Inc. is an American communications technology company primarily known for the videoconferencing application Zoom. The company is headquartered in San Jose, California. The company was founded in 2011 by Eric Yuan, a former Cisco Systems (CSCO) engineer and executive. It launched its software in 2013. The company went public in April 2019 at $36 a share.

To learn more about the company, please click here to visit the website.

The waiting for the year-end rally is over. The Consumer Price Index was released on Friday that came in exceptionally soft at 3.0%. It doesn’t hurt that the Federal Reserve is lowering interest rates on Wednesday by 25 basis points, taking the overnight rate down to 3.75% to 4.0%, the lowest in three years. The weekend trade deal with China is another plus.

With Q3 earnings reports peaking next week, that opens the gates for corporate share buybacks to resume. My own Mad Hedge AI Market Timing Index has been tantalizingly stuck in the 25-30 range for weeks, which usually signals a good time to buy.

The collapse of the Volatility Index ($VIX) from an overnight high of $30 all the way back to $16 is a major plus. We may not get another spike like this for another six months.

What do we buy? Every interest rate-sensitive play out there, even the remote ones.

Therefore, I am buying the Zoom (ZM) November 2025 $72.50-$77.50 in-the-money vertical bull call debit spread at $4.50 or best.

Don’t pay more than $4.70, or you will be chasing.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by ten cents with a second order.

If you don’t want to sit in front of a screen all day or live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like  $4.50, $4.55, $4.60, and $4.65. You should get done on some or all of these.

This is a bet that (ZM) will not drop below $77.50 by the November 21 option expiration in 20 trading days.

Here are the specific trades you need to execute this position:

Buy 25 November 2025 (ZM) $72.50 calls at………………….…$13.00

Sell short 25 November 2025 (ZM) $77.50 calls at………………$8.50

Net cost:………………………….……….…………………………………..$4.50

Potential Profit: $5.00 – $4.50 = $0.50

(25 X 100 X $0.50) = $1,250 or 11.11% in 20 trading days

 

 

 

 

If you are uncertain on how to execute an options spread, please watch my training video by clicking here.

The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.

Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.