Investors in Capital One Financial Corporation COF should pay close attention to equities due to recent movements in the options market. This is because his $41.90 call on January 20, 2023 was his one of the highest implied volatility among stock options today. What is Implied Volatility? Implied volatility indicates how much movement the market expects in the future. Options with high implied volatility suggest that investors in the underlying stock expect a large move in either direction. It can also mean that an event is imminent that could trigger a major rally or sale. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy. What do analysts think? Options traders are clearly pricing big moves in Capital One's stock, but what is the company's bottom line? Currently, Capital One ranks #3 on Zacks' list (hold ) and is in the bottom 14% of Zacks industry rankings. In the last 30 days, 9 analysts have raised their estimates of earnings for the quarter and 5 analysts have lowered their estimates. The net effect increased the Zacks consensus estimate for the quarter from $5.06 to $5.14 per share. Considering how analysts feel about Capital One right now, this huge implied volatility could mean that trades are forming. Pride We often look for options with high volatility. This is a strategy used by many experienced traders to catch the drop. At expiration, these traders hope that the underlying stock price will not move as much as they originally expected. Want to trade options? Take a look at the simple yet powerful approach Zacks Executive His Vice President Kevin Matras recently used to produce double or triple digit winners. In addition to the impressive profit potential, these trades can actually reduce risk.
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