Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • Nikkei

    40,168.07
    -594.66 (-1.46%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Bitcoin USD

    70,707.75
    +1,811.95 (+2.63%)
     
  • 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%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Gold

    2,241.50
    +28.80 (+1.30%)
     
  • Crude Oil

    83.01
    +1.66 (+2.04%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • FTSE Bursa Malaysia

    1,530.60
    -7.82 (-0.51%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Options Traders Expect Huge Moves in Pandora Media (P) Stock

HPT vs. HCP: Which Stock Is the Better Value Option?

Investors in Pandora Media, Inc. P  need to pay close attention to the stock based on moves in the options market lately. That is because the Apr 6th 2018 $5.00 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 Pandora Media, but what is the fundamental picture for the company? Currently, Pandora Media is a Zacks Rank #3 (Hold) in the  Internet - Services industry that ranks in the Bottom 29% of our Zacks Industry Rank. Over the last 60 days, the current quarter Zacks Consensus Estimate has seen no upward versus seven downward revisions. The net effect has taken the Zacks Consensus Estimate from a loss of 25 cents to a loss of 37 cents in that period.

ADVERTISEMENT

Given the way analysts feel about Pandora Media 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 NFLXearnings report completely free. See it here: Trading Netflix's (NFLX) 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
 
Pandora Media, Inc. (P) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research