Advertisement
UK markets closed
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • FTSE 250

    19,884.73
    +74.07 (+0.37%)
     
  • AIM

    743.26
    +1.15 (+0.15%)
     
  • GBP/EUR

    1.1694
    +0.0000 (+0.00%)
     
  • GBP/USD

    1.2621
    -0.0001 (-0.01%)
     
  • Bitcoin GBP

    55,526.65
    -397.96 (-0.71%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • CAC 40

    8,205.81
    +1.00 (+0.01%)
     

Implied Volatility Surging for CBS Corporation (CBS) Stock Options

Is (LXFR) Outperforming Other Industrial Products Stocks This Year?

Investors in CBS Corporation CBS need to pay close attention to the stock based on moves in the options market lately. That is because the Nov 24, 2017 $75.00 Put 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 CBS Corporation shares, but what is the fundamental picture for the company? Currently, CBS Corporation is a Zacks Rank #3 (Hold) in the Broadcast Radio and Television industry that ranks in the Bottom 22% of our Zacks Industry Rank. Over the last 30 days, two analysts have increased their earnings estimates for the current quarter, while four have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from $1.22 per share to $1.20 in that period.

ADVERTISEMENT

Given the way analysts feel about CBS Corporation 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? 

Each week, our very own Dave Bartosiak gives his top options trades. Check out his recent live analysis and options trade for the NFLX earnings report completely free. See it here: Bartosiak: Trading Netflix's (NFLX) Earnings with Options or 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
 
CBS Corporation (CBS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research