U.S. markets closed
  • S&P Futures

    3,754.25
    -2.50 (-0.07%)
     
  • Dow Futures

    29,982.00
    0.00 (0.00%)
     
  • Nasdaq Futures

    11,537.00
    -4.75 (-0.04%)
     
  • Russell 2000 Futures

    1,759.40
    +1.30 (+0.07%)
     
  • Crude Oil

    88.39
    -0.06 (-0.07%)
     
  • Gold

    1,717.80
    -3.00 (-0.17%)
     
  • Silver

    20.65
    -0.01 (-0.07%)
     
  • EUR/USD

    0.9804
    +0.0009 (+0.09%)
     
  • 10-Yr Bond

    3.8260
    +0.0670 (+1.78%)
     
  • Vix

    30.52
    +1.97 (+6.90%)
     
  • GBP/USD

    1.1179
    +0.0010 (+0.09%)
     
  • USD/JPY

    145.0160
    -0.0520 (-0.04%)
     
  • BTC-USD

    19,986.04
    -408.65 (-2.00%)
     
  • CMC Crypto 200

    454.44
    -8.69 (-1.88%)
     
  • FTSE 100

    6,997.27
    -55.35 (-0.78%)
     
  • Nikkei 225

    27,182.04
    -129.26 (-0.47%)
     

Is the Options Market Predicting a Spike in SL Green (SLG) Stock?

·2 min read

Investors in SL Green Realty Corp. SLG need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 20, 2023 $25.00 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 SL Green shares, but what is the fundamental picture for the company? Currently, SL Green is a Zacks Rank #4 (Sell) in the REIT and Equity Trust - Other industry that ranks in the Top 36% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while four have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from $1.72 per share to $1.70 in that period.

Given the way analysts feel about SL Green right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, 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
 
SL Green Realty Corporation (SLG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research