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Is the Options Market Predicting a Spike in Arbutus Biopharma (ABUS) Stock?
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Investors in Arbutus Biopharma Corporation (ABUS - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Mar 18, 2022 $5.00 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 Arbutus Biopharma shares, but what is the fundamental picture for the company? Currently, Arbutus Biopharma is a Zacks Rank #3 (Hold) in the Medical – Biomedical and Genetics industry that ranks in the Bottom 16% of our Zacks Industry Rank. Over the last 30 days, the Zacks Consensus Estimate has widened for the current quarter from a loss of 23 cents per share to a loss of 24 cents.
Given the way analysts feel about Arbutus Biopharma 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 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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Is the Options Market Predicting a Spike in Arbutus Biopharma (ABUS) Stock?
Investors in Arbutus Biopharma Corporation (ABUS - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Mar 18, 2022 $5.00 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 Arbutus Biopharma shares, but what is the fundamental picture for the company? Currently, Arbutus Biopharma is a Zacks Rank #3 (Hold) in the Medical – Biomedical and Genetics industry that ranks in the Bottom 16% of our Zacks Industry Rank. Over the last 30 days, the Zacks Consensus Estimate has widened for the current quarter from a loss of 23 cents per share to a loss of 24 cents.
Given the way analysts feel about Arbutus Biopharma 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 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 >>