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.
Is the Options Market Predicting a Spike in General Dynamics (GD) Stock?
Read MoreHide Full Article
Investors in General Dynamics Corporation (GD - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 17, 2025 $105 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 General Dynamics shares, but what is the fundamental picture for the company? Currently, General Dynamics is a Zacks Rank #3 (Hold) in the Aerospace - Defense industry that ranks in the Bottom 45% of our Zacks Industry Rank. Over the last 30 days, no analysts have increased their earnings estimates for the current quarter, while three analysts have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from $4.49 per share to $4.33 in that period.
Given the way analysts feel about General Dynamics 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.
Image: Bigstock
Is the Options Market Predicting a Spike in General Dynamics (GD) Stock?
Investors in General Dynamics Corporation (GD - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 17, 2025 $105 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 General Dynamics shares, but what is the fundamental picture for the company? Currently, General Dynamics is a Zacks Rank #3 (Hold) in the Aerospace - Defense industry that ranks in the Bottom 45% of our Zacks Industry Rank. Over the last 30 days, no analysts have increased their earnings estimates for the current quarter, while three analysts have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from $4.49 per share to $4.33 in that period.
Given the way analysts feel about General Dynamics 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 >>