Big changes in implied volatilities (IV) are a harbinger of big moves in the underlying stock. For example, if there is a big increase in the VIX (the fear gauge), investors expect a big move in the S&P 500. Raltin has created synthetic VIX like trackers for every stock & ETF to check for big changes in implied volatility. Based on that analysis, here are the stocks that have a big change in IV and are likely to be big movers in the coming weeks. USANA Health Sciences - USNA USANA, is a Utah-based multilevel marketing company that produces various nutritional products, dietary supplements and skincare products. The company’s stock is significantly down this year and trading near its 52-week low. The below chart from the Raltin’s Option analytics indicates that the implied volatility (IV) for the 30 Day At The Money (ATM) call is 54% almost near its 52 week high of 56%. The ATM straddle premium of 12.25% is also close to yearly high of 13.85%. The put call ratio (based on open interest) is 2. https://www.raltin.com/b/june-24-2019-market-mover-predictions-usana-health-sciences-cm436 Apple Hospitality REIT - APLE Apple Hospitality REIT (APLE) is a publicly traded real estate investment trust (REIT) that owns one of the largest and most diverse portfolios of upscale, rooms-focussed hotels in the United States. The IV for the 30 day ATM has shot up from 22% to 34% take the straddle break even point to 9.06% before an ATM straddle premium seller can make a profit. The Put call ratio (based on Open Interest) is 0.7. https://www.raltin.com/b/june-24-2019-market-mover-predictions-apple-hospitality-reit-cm435 DISH network Corporation - DISH DISH Network (DISH) is a U.S. television provider. Based in Meridian, Colorado, the company operates in two segments, Pay-TV and Wireless. The IV on the 30 day ATM options have gone from 37% to 61%. The straddle premium has also gone upto 13.94% from 8.5%. The put call ratio (based on open interest) stands at 0.26. https://www.raltin.com/b/june-24-2019-market-mover-predictions-dish-network-cm434
Interim earnings release date as has been projected is - USNA - 26-Jul-2019 APLE - 7-Aug-2019 DISH - 5-Aug-2019
Change in Implied Volatility means to us that the option buyers / sellers are expecting a big jump in the underlying.
Yes, agree so if you have no real idea if it up or down, and just buying the straddle with "cost' you whats the point of all this ? Thank you
Yes. Few ways this can be traded: 1) This is to alert traders that big moves are expected and some traders based on other information/analysis may make a judgment on whether is likely to be an up or down 2) This helps vol traders to set up Iron Butterflies / Straddles trades either from a buying or selling perspective.
Thank you, yep guessing. Its an art form, just no one of these artist are selling their " paintings" ! Understand, they are not success doing this guess. Look at 'steady options" NOT scalable, many trader there with 10k -30k accounts paying over 10 % of capital annual for the service, PLUS commissions because the strat requires lots of initial trades PLUS lots of adjustments.....
The market "trades" a lot becasue investors and portfolio managers have a real need to BUY and also HEDGE. These "tools" to spec are not very good. Spec should only spec few times month or quarter with large size and use of careful leverage, with a drwdowns in the 1.5 percent range, excpect only good ones to beat SP500 returns and have outsized returns during major events like 08' where you shorted the paper that HAD to get out... understand ? Or no ?