U.S. markets open in 9 hours 30 minutes
  • S&P Futures

    4,209.50
    -13.50 (-0.32%)
     
  • Dow Futures

    33,906.00
    -111.00 (-0.33%)
     
  • Nasdaq Futures

    13,914.50
    -66.75 (-0.48%)
     
  • Russell 2000 Futures

    2,300.10
    -10.00 (-0.43%)
     
  • Crude Oil

    71.75
    -0.40 (-0.55%)
     
  • Gold

    1,824.10
    -37.30 (-2.00%)
     
  • Silver

    27.22
    -0.60 (-2.15%)
     
  • EUR/USD

    1.1998
    -0.0135 (-1.12%)
     
  • 10-Yr Bond

    1.5690
    +0.0700 (+4.67%)
     
  • Vix

    18.15
    +1.13 (+6.64%)
     
  • GBP/USD

    1.3993
    -0.0089 (-0.63%)
     
  • USD/JPY

    110.7260
    +0.6920 (+0.63%)
     
  • BTC-USD

    38,856.50
    -1,219.20 (-3.04%)
     
  • CMC Crypto 200

    966.95
    -25.52 (-2.57%)
     
  • FTSE 100

    7,184.95
    +12.47 (+0.17%)
     
  • Nikkei 225

    28,950.99
    -340.02 (-1.16%)
     

Are Options Traders Betting on a Big Move in Ashford Hospitality (AHT) Stock?

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.

Investors in Ashford Hospitality Trust, Inc. AHT need to pay close attention to the stock based on moves in the options market lately. That is because the Jun 18, 2021 $5.00 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 Ashford Hospitality shares, but what is the fundamental picture for the company? Currently, Ashford Hospitality is a Zacks Rank #4 (Sell) in the REIT and Equity Trust - Other industry that ranks in the Bottom 12% of our Zacks Industry Rank. Over the last 30 days, no analyst has increased the earnings estimates for the current quarter, while one has revised the estimate downward. The net effect has widened our Zacks Consensus Estimate for the current quarter from a loss of 40 cents per share to a loss of 46 cents per share in that period.

Given the way analysts feel about Ashford Hospitality 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
 
Ashford Hospitality Trust Inc (AHT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research