U.S. markets open in 1 hour 38 minutes
  • S&P Futures

    3,600.50
    +24.50 (+0.69%)
     
  • Dow Futures

    29,828.00
    +282.00 (+0.95%)
     
  • Nasdaq Futures

    11,934.50
    +29.25 (+0.25%)
     
  • Russell 2000 Futures

    1,839.40
    +22.30 (+1.23%)
     
  • Crude Oil

    43.63
    +0.57 (+1.32%)
     
  • Gold

    1,808.80
    -29.00 (-1.58%)
     
  • Silver

    23.19
    -0.44 (-1.85%)
     
  • EUR/USD

    1.1867
    +0.0021 (+0.18%)
     
  • 10-Yr Bond

    0.8570
    0.0000 (0.00%)
     
  • Vix

    22.13
    -1.57 (-6.62%)
     
  • GBP/USD

    1.3324
    +0.0002 (+0.01%)
     
  • USD/JPY

    104.5650
    +0.0770 (+0.07%)
     
  • BTC-USD

    19,127.05
    +675.08 (+3.66%)
     
  • CMC Crypto 200

    376.26
    +14.83 (+4.10%)
     
  • FTSE 100

    6,396.09
    +62.25 (+0.98%)
     
  • Nikkei 225

    26,165.59
    +638.22 (+2.50%)
     

Are Options Traders Betting on a Big Move in Acorda Therapeutics (ACOR) Stock?

Zacks Equity Research
·2 min read

Investors in Acorda Therapeutics, Inc. ACOR need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 16, 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 Acorda Therapeutics shares, but what is the fundamental picture for the company? Currently, Acorda Therapeutics is a Zacks Rank #3 (Hold) in the Medical - Biomedical and Genetics industry that ranks in the Bottom 24% of our Zacks Industry Rank. Over the last 60 days, no analysts have increased their earnings estimates for the current quarter, while three analysts have revised the estimate downward. The net effect has widened our Zacks Consensus Estimate for the current quarter from 22 cents per share to 31cents in that period.

Given the way analysts feel about Acorda Therapeutics 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
 
Acorda Therapeutics, Inc. (ACOR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research