Advertisement
Singapore markets open in 2 hours 7 minutes

  • Straits Times Index

    3,293.13
    +20.41 (+0.62%)
     

  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     

  • Dow

    38,460.92
    -42.77 (-0.11%)
     

  • Nasdaq

    15,712.75
    +16.11 (+0.10%)
     

  • Bitcoin USD

    63,993.96
    -2,417.25 (-3.64%)
     

  • CMC Crypto 200

    1,387.38
    -36.72 (-2.58%)
     

  • FTSE 100

    8,040.38
    -4.43 (-0.06%)
     

  • Gold

    2,329.30
    -9.10 (-0.39%)
     

  • Crude Oil

    82.79
    -0.02 (-0.02%)
     

  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     

  • Nikkei

    38,460.08
    +907.92 (+2.42%)
     

  • Hang Seng

    17,201.27
    +372.34 (+2.21%)
     

  • FTSE Bursa Malaysia

    1,571.48
    +9.84 (+0.63%)
     

  • Jakarta Composite Index

    7,174.53
    -7,110.81 (-49.78%)
     

  • PSE Index

    6,572.75
    +65.95 (+1.01%)
     

Is the Options Market Predicting a Spike in Endo International (ENDP) Stock?

Zacks Equity Research
Updated
DG vs. TJX: Which Stock Is the Better Value Option?

Investors in Endo International plc ENDP need to pay close attention to the stock based on moves in the options market lately. That is because the Jul 20, 2018 $8 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 Endo International shares, but what is the fundamental picture for the company? Currently, Endo International is a Zacks Rank #3 (Hold) in the Medical - Drugs industry that ranks in the Top 42% of our Zacks Industry Rank. Over the last 60 days, two analysts have increased earnings estimates for the current quarter, while seven have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 58 cents per shareto 54 cents in that period.

ADVERTISEMENT

Given the way analysts feel about Endo International 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 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
 
Endo International plc (ENDP) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research