Advertisement
UK markets open in 23 minutes

  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

  • HANG SENG

    16,204.38
    -181.49 (-1.11%)
     

  • CRUDE OIL

    83.85
    +1.12 (+1.35%)
     

  • GOLD FUTURES

    2,395.80
    -2.20 (-0.09%)
     

  • DOW

    37,775.38
    +22.07 (+0.06%)
     

  • Bitcoin GBP

    50,129.09
    +922.68 (+1.88%)
     

  • CMC Crypto 200

    1,280.36
    -32.26 (-2.46%)
     

  • NASDAQ Composite

    15,601.50
    -81.87 (-0.52%)
     

  • UK FTSE All Share

    4,290.02
    +17.00 (+0.40%)
     
Money:

Best mortgage deals of the week

As possibility of multiple interest rate cuts dwindle here's what banks and building societies are offering

Implied Volatility Surging for Acura (ACUR) Stock Options

Zacks Equity Research
Updated

Investors in Acura Pharmaceuticals, Inc. ACUR need to pay close attention to the stock based on moves in the options market lately. That is because the July 21st, 2017, $2.5 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 Acura shares, but what is the fundamental picture for the company? Currently, Acura is a Zacks Rank #3 (Hold) in the Medical - Generic Drugs industry that ranks in the Bottom 49% of our Zacks Industry Rank. Over the last 60 days, no analysts have increased their earnings estimate for the current quarter, while one has dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from loss of 23 cents per shareto a loss of 27 cents in that period.

ADVERTISEMENT

Given the way analysts feel about Acura 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?

Each week, our very own Dave Bartosiak gives his top options trades. Check out his recent live analysis and options trade for the MUearnings report completely free. See it here: Bartosiak: Trading Micron's (MU) Earnings with Optionsor check out the embedded video below for more details:

 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Acura Pharmaceuticals, Inc. (ACUR): Free Stock Analysis Report
 
To read this article on Zacks.com click here.