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Implied Volatility Surging for Aphria (APHA) Stock Options

Investors need to pay close attention to Aphria (APHA) stock based on the movements in the options market lately. Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Investors in Aphria Inc. APHA need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 18, 2019 $7.50 Call had some of the highest implied volatility of all equity options today.” data-reactid=”18″>Investors in Aphria Inc. APHA need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 18, 2019 $7.50 Call had some of the highest implied volatility of all equity options today.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="What is Implied Volatility?” data-reactid=”19″>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.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="What do the Analysts Think?” data-reactid=”21″>What do the Analysts Think?

Clearly, options traders are pricing in a big move for Aphria shares, but what is the fundamental picture for the company? Currently, Aphria is a Zacks Rank #3 (Hold) in the Medical – Products industry that ranks in the Top 30% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimate for the current quarter, while none have dropped their estimates. The net effect has narrowed our Zacks Consensus Estimate for the current quarter from a loss of 4 cents per share to a loss 2 cents in that period.

Given the way analysts feel about Aphria 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.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Looking to Trade Options?” data-reactid=”24″>Looking to Trade Options?

Check out the simple yet high-powered approach that Zacks Executive VP Kevin Matras has used to close recent double and triple-digit winners. In addition to impressive profit potential, these trades can actually reduce your risk.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Click to see the trades now &gt;&gt;” data-reactid=”26″>Click to see the trades now >>

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Aphria Inc. (APHA) : Free Stock Analysis Report
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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
 
Aphria Inc. (APHA) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

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