Stocks with Notable Option Volatility: ContextLogic, Albertsons, Coca-Cola and More
Implied volatility is a measure of the market's expectation of the potential price movements of the stock in the future. Here are the stocks with the most notable Implied volatility today."
Here are the notable stocks with the highest and lowest implied volatility.
The $Asensus Surgical(ASXC.US$, $Mullen Automotive(MULN.US$, and $ContextLogic(WISH.US$ has the highest implied volatility of all stocks with a market cap of over 10 million yesterday.
ContextLogic (WISH) saw a sharp decline in its share price on Tuesday, dropping 21% in a single day and continuing to fall by 18% in early morning trading on Wednesday. The online retailer's option volume reached 12.33K with an IV percentile of 99% and a current IV of 369%, indicating high levels of volatility.
The drop in share price came after ContextLogic announced a 1-for-30 reverse stock split, effective Wednesday. This means that for every 30 shares of WISH owned by investors, they will receive one share of the company on a split-adjusted basis. Such a move is often seen as a last-ditch effort to boost share prices when a company's stock has been in decline.
The $Workhorse(WKHS.US$, $Albertsons Companies(ACI.US$, and $Walmart(WMT.US$ has the lowest implied volatility of all stocks with a market cap of over 10 million yesterday.
Given the low IV percentile of 9%, option prices for Coca-Cola (KO) are relatively cheap. This presents an opportunity for traders to consider buying options ahead of the company's earnings release on April 24th. With the stock price showing modest gains, there may be an expectation of positive earnings results. However, traders should be aware of potential market volatility that may impact option prices before and after the earnings release.
Investors who are bullish on KO's prospects may consider buying call options, which give them the right to purchase shares at a specific price, known as the strike price, before a specific expiration date. Conversely, those who are bearish on KO may consider buying put options, which give them the right to sell shares at the strike price before the expiration date.
Top Option Volatiliy Change
Conclusion And Risk Management
Option implied volatility is a measure of the market's expectation for how much an asset's price will fluctuate in the future, as implied by the prices of options on that asset.
Options are financial contracts that give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price and time. The price of an option is influenced by various factors, including the current price of the underlying asset, the strike price, the time to expiration, and the implied volatility.
Implied volatility represents the level of uncertainty or risk that market participants perceive in the future price movements of the underlying asset. When investors expect greater volatility, they may be more willing to pay a higher price for options to help hedge their risk, which leads to higher implied volatility.
Implied volatility is usually expressed as a percentage and is calculated using an options pricing model, such as the Black-Scholes model. Traders and investors use implied volatility to assess the attractiveness of options prices, to identify potential mispricings, and to manage their risk exposure.
Source: Benzinga, Dow Jones, CNBC
Disclaimer:
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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