Stock Options at NCR Corporation (NCR), Implied Volatility Rising
Investors in NCR Corporation NCR You should pay attention to the stock, based on recent moves in the options markets. The Jan 20, 2023 $13.00 call had some of today’s highest implied volatility.
What is Implied Volatility and how can it be used?
The market’s expectation of future movement is called implied volatility. Options with high levels implied volatility indicate that investors in the underlying stocks expect a major move in one direction or another. It could also indicate that an event is coming up that will cause a large rally or a sell-off. But implied volatility is just one piece of the puzzle in order to create an options trading strategy.
What think Analysts?
NCR Corporation shares are clearly being priced in by options traders. But what is the overall picture of the company? NCR Corporation currently has a Zacks Rank 4 (Sell), in the Computer – Integrated Systems sector, which ranks in the Bottom 21% for our Zacks Industry Rank. Four analysts have decreased their earnings estimates over the past 60-days, while none of the analysts have increased them. This has resulted in our Zacks Consensus estimate for the current quarter dropping from 97 to 82 cents per share.
Given the way analysts feel about NCR Corporation right now, this huge implied volatility could mean there’s a trade developing. Options traders often look for options that have high implied volatility in order to sell premium. It captures decay and is a strategy that many experienced traders use. These traders hope that the underlying stock doesn’t move as much after expiration.
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