We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Implied Volatility Surging for ProPetro (PUMP) Stock Options
Read MoreHide Full Article
Investors in ProPetro Holding Corp. (PUMP - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Jul 17, 2020 $7.50 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 ProPetro shares, but what is the fundamental picture for the company? Currently ProPetro is a Zacks Rank #3 (Hold) in the Oil and Gas - Field Services industry that ranks in the Top 36% of our Zacks Industry Rank. Over the last 30 days, four analysts have increased their earnings estimates for the current quarter, while three have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 3 cents per share to a loss of 5 cents in that period.
Given the way analysts feel about ProPetro right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, 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 doesnot 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.
Image: Bigstock
Implied Volatility Surging for ProPetro (PUMP) Stock Options
Investors in ProPetro Holding Corp. (PUMP - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Jul 17, 2020 $7.50 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 ProPetro shares, but what is the fundamental picture for the company? Currently ProPetro is a Zacks Rank #3 (Hold) in the Oil and Gas - Field Services industry that ranks in the Top 36% of our Zacks Industry Rank. Over the last 30 days, four analysts have increased their earnings estimates for the current quarter, while three have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 3 cents per share to a loss of 5 cents in that period.
Given the way analysts feel about ProPetro right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, 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 doesnot 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 >>