Investors in ConocoPhillips (COP - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 21, 2022 $30.00 Call had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for ConocoPhillips shares, but what is the fundamental picture for the company? Currently, ConocoPhillips is a Zacks Rank #3 (Hold) in the Oil and Gas - Integrated - United States industry that ranks in the Bottom 15% of our Zacks Industry Rank. Over the last 60 days, six analysts have increased the earnings estimates for the current quarter, while one has revised the estimate downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from $1.93 per share to $2.19 per share in that period.
Given the way analysts feel about ConocoPhillips right now, this huge implied volatility could mean there’s a trade developing. Often times, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
Looking to Trade Options?
Check out the simple yet high-powered approach that Zacks Executive VP Kevin Matras has used to close recent double and triple-digit winners. In addition to impressive profit potential, these trades can actually reduce your risk.
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Investors in ConocoPhillips (COP - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 21, 2022 $30.00 Call had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for ConocoPhillips shares, but what is the fundamental picture for the company? Currently, ConocoPhillips is a Zacks Rank #3 (Hold) in the Oil and Gas - Integrated - United States industry that ranks in the Bottom 15% of our Zacks Industry Rank. Over the last 60 days, six analysts have increased the earnings estimates for the current quarter, while one has revised the estimate downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from $1.93 per share to $2.19 per share in that period.
Given the way analysts feel about ConocoPhillips right now, this huge implied volatility could mean there’s a trade developing. Often times, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
Looking to Trade Options?
Check out the simple yet high-powered approach that Zacks Executive VP Kevin Matras has used to close recent double and triple-digit winners. In addition to impressive profit potential, these trades can actually reduce your risk.
Click to see the trades now >>
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
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