Create a New Account. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. Investors in Arena Pharmaceuticals, Inc. ARNA - Free Report need to pay close attention to the stock based on moves in the options market lately. 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.
Clearly, options traders are pricing in a big move for Arena Pharmaceuticals shares, but what is the fundamental picture for the company? Over the last 60 days, 2 analysts have increased their earnings estimates for the current quarter, while none have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 80 cents per shareto a loss of 67 cents in that period. 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. Each week, our very own Dave Bartosiak gives his top options trades. Check out his recent live analysis and options trade for the TSLA earnings report completely free.
Tesla Earnings Preview with Options Trade Ideas or check out the embedded video below for more details:. Forgot Password Create a New Account. If you wish to go to ZacksTrade, click OK. If you do not, click Cancel. Read More Hide Full Article. What is Implied Volatility? What do the Analysts Think? Looking to Trade Options? Tesla Earnings Preview with Options Trade Ideas or check out the embedded video below for more details:More...