U.S. markets closed

Implied Volatility Surging for New Gold (NGD) Stock Options

Zacks Equity Research

Investors in New Gold Inc. NGD need to pay close attention to the stock based on moves in the options market lately. That is because the Feb 21, 2020 $1.00 Call 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 New Gold shares, but what is the fundamental picture for the company? Currently, New Gold is a Zacks Rank #3 (Hold) in the Mining - Gold industry that ranks in the Bottom 36% of our Zacks Industry Rank. Over the last 60 days, no analysts have increased their earnings estimates for the current quarter, while two have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 3 cents per share to a loss of 4 cents in that period.

Given the way analysts feel about New Gold 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.

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.

Click to see the trades now >>
 


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

  • Coronavirus stimulus-package tax relief: Withdraw $100K from your IRA — and repay in 3 years with zero tax liability
    Business
    MarketWatch

    Coronavirus stimulus-package tax relief: Withdraw $100K from your IRA — and repay in 3 years with zero tax liability

    The new law is a daunting 880 pages long, but it contains lots of good news for individuals and businesses, including meaningful tax relief. This column explains one tax-relief measure that can potentially benefit many IRA owners. IRA owners who are adversely affected by the coronavirus pandemic (and there will be plenty of them) will be eligible to take tax-favored coronavirus-related distributions from their IRAs.

  • You can be ‘practically stealing’ quality stocks now, according to Jefferies
    Business
    MarketWatch

    You can be ‘practically stealing’ quality stocks now, according to Jefferies

    Investors are trying to get ahead of an eventual turnaround for the stock market, even as the coronavirus spreads further across the U.S. Analysts at Jefferies have published a list of 47 stocks that they believe have “strong fundamentals” and attractive valuations, with opportunities created by “indiscriminate selling” over the past month. The largest of the recommended companies are listed below. Warnings Before getting to the list of “best stock ideas” from Jefferies, a number of warnings are in order: • It's too early to call a stock market bottom — it's a fool's errand.

  • 7 Strong Stocks to Buy to Survive the Coronavirus Crisis
    Business
    InvestorPlace

    7 Strong Stocks to Buy to Survive the Coronavirus Crisis

    U.S. Stocks to Buy on Coronavirus Weakness With that in mind, some of the best stocks to buy that should survive the coronavirus crisis include: Nike (NYSE:NKE) Apple (NASDAQ:AAPL) Starbucks (NASDAQ:SBUX) Microsoft (NASDAQ:MSFT) Disney (NYSE:DIS) McDonald's (NYSE:MCD) Walmart (NYSE:WMT) Stocks to Buy to Survive the Coronavirus Crisis: Nike (NKE) Over the past 35 years, global athletic apparel maker Nike has seen a crisis or two — and each time, NKE stock overcame the crisis, and proceeded to rally to all-time highs as soon as the crisis cleared up. During the Flash Crash of 1987, NKE stock dropped 35% in a few months. By early 1988, the stock had rallied back to new all-time highs.

  • These are the 20 stocks corporate insiders have been buying most amid the coronavirus-induced market selloff
    Business
    MarketWatch

    These are the 20 stocks corporate insiders have been buying most amid the coronavirus-induced market selloff

    Throughout these topsy-turvy times of scary health news, city lockdowns and daily market moves of 5% or more in both directions, there's been one comforting constant. Corporate insiders — executives and directors who buy shares in their own company — are loving this pullback. Since the S&P 500 index (SPX) Dow Jones Industrial Average (DJIA) and Nasdaq Composite Index (COMP) really began falling apart after March 5, insiders have been heavily buying all the areas that will supposedly get hit the hardest by this coronavirus and the COVID-19 illness it causes.

  • Getting crushed in this market? One look at Warren Buffett’s portfolio and you might feel a lot better about yours
    Business
    MarketWatch

    Getting crushed in this market? One look at Warren Buffett’s portfolio and you might feel a lot better about yours

    Warren Buffett said earlier this month that he hadn't seen anything like the coronavirus pandemic. A couple of weeks later, and it's only gotten more dire as infections mount around the world and the stock market continues to spin out of control in both directions. “While Buffett is well known for weathering the worst market downturns and coming out stronger, the last several weeks have been just as painful on his portfolio as it has on the broader market,” Bespoke explained in a post noting that the average stock in his top holdings is off 37%.

  • He said it in 1987 and in 2008 — now he’s saying it again: You’ll never see better bargains in the stock market
    Business
    MarketWatch

    He said it in 1987 and in 2008 — now he’s saying it again: You’ll never see better bargains in the stock market

    That's John Rogers, chairman of Ariel Investments, urging investors in an interview Wednesday night on CNBC to take advantage of the stock market's recent plunge. Rogers cited Sir John Templeton's advice that the time to buy is “when there's maximum pessimism. And, with the coronavirus pandemic sparking wild swings, that time, he says, is now.

  • Exxon’s Safe Dividend Makes XOM Stock a Bargain Right Now
    Business
    InvestorPlace

    Exxon’s Safe Dividend Makes XOM Stock a Bargain Right Now

    Stocks to Buy That Will Benefit From Coronavirus Mayhem So if Exxon was going to signal a dividend cut it will happen within the next month or so. So far no bad news. Exxon Can Afford Its Dividend Last year, Exxon generated almost $30 billion ($29.7 b) in free cash flow from operations (CFFO) before its capex spending.

  • Dozens of virus deaths in NY funeral home
    U.S.
    Associated Press Videos

    Dozens of virus deaths in NY funeral home

    Dozens of virus deaths in NY funeral home

  • Is Abbott A Buy After Gaining FDA Blessing For Its Coronavirus Test?
    Business
    Investor's Business Daily

    Is Abbott A Buy After Gaining FDA Blessing For Its Coronavirus Test?

    So, while the medical company's sales and earnings have grown consistently for several years, Abbott isn't lining up with CAN SLIM rules for investing. Investors are advised to seek companies with recent quarterly earnings and sales growth of 20%-25%. The bigger, the better.

  • These indicators suggest a stock-market bottom, but coronavirus fears could send the S&P 500 swooning again
    Business
    MarketWatch

    These indicators suggest a stock-market bottom, but coronavirus fears could send the S&P 500 swooning again

    U.S. stocks staged an impressive rebound in the past week as the Federal Reserve and Congress have delivered unprecedented fiscal and monetary stimulus aimed at dampening the blow the coronavirus epidemic has dealt to the U.S. economy. The question investors must now ask themselves is whether or not the equities market has already hit the bottom of this bear market or whether investors should prepare themselves for worse to come. During the week ended Friday, the Dow Jones Industrial Average (DJIA) rose 12.8%, the S&P 500 index (SPX) gained 10.3% and the Nasdaq Composite index (COMP) rose 9.1%, after each fell more than 30% from their mid-February record highs.

  • Business
    Oilprice.com

    Canadian Drillers Face Nightmare Scenario As Oil Crashes To $5

    This year's oil price crash will hit Canada's oil patch harder than the 2014 price collapse, analysts say. Following the double supply-demand shock of the past weeks, the industry had to quickly switch back to survival mode, just as it was expecting an uptick in upstream investments this year, for the first time in five years. Canada's oil and gas sector now faces an existential threat – losing even the little competitiveness it held onto in the wake of the previous oil crash.

  • Abbott Labs releases coronavirus test system that has results in 5 minutes
    Business
    American City Business Journals

    Abbott Labs releases coronavirus test system that has results in 5 minutes

    Abbott Laboratories said it has received emergency-use authorization from the U.S. Food and Drug Administration for its device that can render positive results for the coronavirus in five minutes. The Abbott Park, Illinois-based pharmaceutical company (NYSE: ABT) said its molecular point-of-care test for novel coronavirus is the fastest test available and can deliver negative results in 13 minutes. The test doesn't have to be administered in a hospital, Abbott said, but can be used in healthcare settings such as physicians' offices and urgent care clinics, as well as hospital emergency departments.

  • Sell the Bailout Rally in United Airlines Stock
    Business
    InvestorPlace

    Sell the Bailout Rally in United Airlines Stock

    United Airlines stock, for example, has doubled from its low point over the past week, though admittedly the current $33 price is far short of the previous $90 peak. That said, sometimes when a stock price doubles in a few days, you should take advantage of it and get out while the getting is good. This is one of those cases.

  • Business
    Barrons.com

    The Dow Ignored the Spread of Coronavirus Last Week. It Won’t Be Able to Anymore.

    As the disease has spread, fears about the possible death toll and the extent of the economic disaster roiled global financial markets. The Dow Jones Industrial Average rallied more than 20% off its low, putting it in a bull market, at least by some definitions, though it remains down 24.2% on the year. It is far from contained, and Covid-19, the respiratory disease caused by the virus, continues to spread.

  • How to Turn an Old Tablet into a Video Chat Box
    News
    WSJ

    How to Turn an Old Tablet into a Video Chat Box

    Forget buying a fancy Facebook Portal or Amazon Echo Show. Dig out your old tablet or smartphone and make a homemade stand out of a box, wire hanger or even an egg carton. WSJ's Joanna Stern has all the DIY tips you need.

  • Passengers on ‘Death Ship’ Plead for Rescue After Virus Strikes
    U.S.
    Bloomberg

    Passengers on ‘Death Ship’ Plead for Rescue After Virus Strikes

    For passengers on a Holland America Line cruise ship, a fun-filled voyage on the luxury liner is quickly turning into a nightmare with deteriorating conditions on board and fears of a full-blown coronavirus outbreak after four travelers died and two others were infected. “We are stuck on this death ship,” said Yadira Garza, who is on board with her newly-wed husband. Passengers on the Zaandam, currently off the coast of Panama, say they are desperate to get off the liner after Chile wouldn't allow the vessel to dock.

  • If you do this now, you might be able to double your retirement portfolio
    Business
    MarketWatch

    If you do this now, you might be able to double your retirement portfolio

    The coronavirus crisis has created an extraordinary buying opportunity in emerging market stocks for anyone hoping to save for their retirement, say two independent investment houses. Buy a broad portfolio of inexpensive “value” stocks in developing markets such as China, South Korea, Russia, Brazil, India and you've got a good chance of doubling your money or better over the next five to seven years, say number crunchers at investment advisory firm Research Affiliates in Newport Beach, Calif., and at the blue chip money managers GMO in Boston. “Value” stocks are those that are inexpensive in relation to business fundamentals such as company revenues, assets and earnings.

  • Man who scored big wins during the 2008 financial crisis says the stock market could be ‘near a bottom’ if U.S. gets a coronavirus recovery plan
    Business
    MarketWatch

    Man who scored big wins during the 2008 financial crisis says the stock market could be ‘near a bottom’ if U.S. gets a coronavirus recovery plan

    Hedge-fund manager David Tepper says there is nothing wrong with “nibbling” at stocks that have experienced a brutal selloff in the past month, amid growing fears centered on the economic impact of the coronavirus pandemic. However, the star fund manager and billionaire says that U.S. lawmakers and the Trump administration need to act quickly to stabilize the economy and mitigate the damage from the deadly pathogen. There's nothing wrong with nibbling here,” the founder of Appaloosa Management said during a phone interview with CNBC on Monday, referring to stocks that have fallen at an unprecedented rate, as business activity across the globe shutters in order to contain the illness, COVID-1...

  • 3 Casino Stocks You Shouldn’t Roll the Dice On
    Business
    InvestorPlace

    3 Casino Stocks You Shouldn’t Roll the Dice On

    Stocks to Buy That Will Benefit From Coronavirus Mayhem Let's build three bear trades to profit. Casino Stocks to Sell: Wynn Resorts WYNN Wynn Resorts (NASDAQ:WYNN) has doubled off the lows and its chart still looks bearish. Buyers do deserve some credit, though.

  • China’s $30 Trillion Market Promise Beckons Global Wealth Firms
    Business
    Bloomberg

    China’s $30 Trillion Market Promise Beckons Global Wealth Firms

    China's trillion dollar asset-management market opens wider this week, forcing BlackRock Inc., Vanguard Group Inc. and other global firms to make a strategic decision: Go it alone or work with an entrenched local partner. While the further liberalization of the investment banking and money management industries in China has been overshadowed by the coronavirus crisis, wealth firms are nonetheless laying out plans to tap a market poised to reach $30 trillion in assets by 2023, according to consultant Oliver Wyman. Starting April 1, they can apply for licenses to set up wholly-owned mutual fund management firms for the first time.

  • Why this wild coronavirus rally has Wall Street experts fearing a bull-market trap
    Business
    MarketWatch

    Why this wild coronavirus rally has Wall Street experts fearing a bull-market trap

    Blink and you may have missed it — the Dow Jones Industrial Average (DJIA) is in a bull market, reached on a day when data showed a record number of people filing for unemployment benefits. The 21% gain in the last three days ends what was just an 11-day bear market for the blue chips. The broader S&P 500 (SPX) has advanced a mere 18% over three days (the best stretch since 1933), leaving it shy of the 20% advance from the low that marks the informal definition of a bull market.

  • Is Gold Mirroring 1999 to 2011 Again?
    Business
    FX Empire

    Is Gold Mirroring 1999 to 2011 Again?

    Our research team continues to dig into underlying patterns and set up in the global markets to assist skilled technical traders in understanding the current Covid-19 virus event and other key technical data. Recently, we've authored a number of detailed research articles that we believe helped prepare traders for the events of the past 30 to 90+ days. Today, we are writing about a pattern our research team is seeing in the Gold/Silver ratio which is correlated to the price movement of Gold.

  • Here's What Analysts Are Forecasting For The Home Depot, Inc. (NYSE:HD) After Its Yearly Results
    Business
    Simply Wall St.

    Here's What Analysts Are Forecasting For The Home Depot, Inc. (NYSE:HD) After Its Yearly Results

    The investors in The Home Depot, Inc.'s (NYSE:HD) will be rubbing their hands together with glee today, after the share price leapt 25% to US$191 in the week following its yearly results. Results were roughly in line with estimates, with revenues of US$110b and statutory earnings per share of US$10.25. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual.

  • Chesapeake Energy Stock Is Unlikely to Survive the Downturn
    Business
    InvestorPlace

    Chesapeake Energy Stock Is Unlikely to Survive the Downturn

    Chesapeake Energy (NYSE:CHK) stock is especially vulnerable. CHK stock tried to hold the 50 cent support line on the charts. Falling oil prices and the economic slowdown due to the coronavirus from China put Chesapeake Energy shareholders in jeopardy.

  • Welcome to a Truly Free Oil Market
    Business
    Bloomberg

    Welcome to a Truly Free Oil Market

    At the point we're now at, postponing the oil-price war won't make a lot of difference for an industry that's already breaking down under the weight of demand destruction. It's too late to use diplomacy and artful negotiations to share the burden of output cuts that are now inevitable. The pumping free-for-all unleashed by Saudi Arabia and Russia is important for the long-term shape of the oil industry, but, as my colleague Javier Blas pointed out here, it's a sideshow to the havoc being wrought by the lockdowns crippling economies worldwide in response to the coronavirus pandemic.