GameStop: Implied Volatility Surging for GameStop (GME) Stock Options

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GameStop: GameStop Corp investors. GME should pay close attention to equities given recent developments in the options market. In fact, the $ 14 sale on December 18, 2020, had one of the highest unspoken volatilities of any stock option today.

What is Implied Volatility?

Unexpressed volatility shows the expected movement of the market in the future. The high volatility options suggest that investors are expecting a large move one way or another in the underlying stocks. It could also mean that an event is imminent that could cause a big rally or sell-off. However, unspoken volatility is only part of the puzzle when developing an options trading strategy.

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GameStop: What do analysts think?

Sure, options traders see a big change for the GameStop title, but what is the company’s key image? GameStop is currently a Zacks Rank 3 (Hold) in the consumer electronics and retail industry and is in the top 38% of the Zacks industry rankings. Over the past 60 days, two analysts have raised their earnings estimates for the current quarter, while neither has revised their estimates downward. Net income reduced Zacks’ consensus estimate for the current quarter from a loss of 83 cents per share to a loss of 81 cents for the period.

Given the analyst’s current opinion on GameStop, this massive imputed volatility could mean a trade is in progress. Options traders often look for options with unspoken high volatility to sell rewards. This is a strategy used by many marketers because it captures analytics. When it expires, these traders hope that the underlying stock does not move as originally expected.

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