U.S. Markets close in 5 hrs 56 mins
  • S&P 500

    3,909.87
    -15.56 (-0.40%)
     
  • Dow 30

    31,918.45
    -43.41 (-0.14%)
     
  • Nasdaq

    13,510.56
    -87.41 (-0.64%)
     
  • Russell 2000

    2,284.47
    +0.09 (+0.00%)
     
  • Crude Oil

    62.93
    -0.29 (-0.46%)
     
  • Gold

    1,783.70
    -14.20 (-0.79%)
     
  • Silver

    27.99
    +0.06 (+0.20%)
     
  • EUR/USD

    1.2238
    +0.0070 (+0.5752%)
     
  • 10-Yr Bond

    1.4540
    +0.0650 (+4.68%)
     
  • Vix

    22.24
    +0.90 (+4.22%)
     
  • GBP/USD

    1.4159
    +0.0018 (+0.1288%)
     
  • USD/JPY

    106.1310
    +0.2490 (+0.2352%)
     
  • BTC-USD

    50,924.72
    +1,358.39 (+2.74%)
     
  • CMC Crypto 200

    1,018.41
    +23.75 (+2.39%)
     
  • FTSE 100

    6,677.97
    +19.00 (+0.29%)
     
  • Nikkei 225

    30,168.27
    +496.57 (+1.67%)
     

Do Options Traders Know Something About Tellurian (TELL) Stock We Don't?

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

Investors in Tellurian Inc. TELL need to pay close attention to the stock based on moves in the options market lately. That is because the Apr 16, 2021 $1.50 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 Tellurian shares, but what is the fundamental picture for the company? Currently, Tellurian is a Zacks Rank #3 (Hold) in the Oil and Gas - Refining and Marketing industry that ranks in the Bottom 1% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while none have dropped their estimates. The net effect has narrowed our Zacks Consensus Estimate for the current quarter from a loss of 7 cents per share to a loss of 6 cents in that period.

Given the way analysts feel about Tellurian 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
 
Magellan Petroleum Corporation (TELL) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research