Options Traders Expect Huge Moves in Cronos (CRON) Stock
Investors in Cronos Group Inc.
CRON need to pay close attention to the stock based on moves in the
options market lately. That is because the Mar 22, 2019 $19.00 Put
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 Cronos
shares, but what is the fundamental picture for the company?
Currently, Cronos is a Zacks Rank #3 (Hold) in the Financial -
Investment Management that ranks in the Bottom 44% of our Zacks
Industry Rank. Over the last 30 days, our Zacks Consensus Estimate
for the current quarter widened from a loss of 1 cents per share to
a loss of 2 cents.
Given the way analysts feel about Cronos 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.
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