Opko Health Inc (OPK)

[terry hallinan]

FWIW

Zacks Equity Research
ZacksMarch 8, 2018
Implied Volatility Surging for Opko Health (OPK) Stock Options
Surging implied volatility makes Opko Health (OPK) lucrative to the option traders.

Investors in Opko Health, Inc. OPK need to pay close attention to the stock based on moves in the options market lately. That is because the Mar 16th 2018 $10.00 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 Opko Health, but what is the fundamental picture for the company? Currently, Opko Health is a Zacks Rank #4 (Sell) in the Medical - Instruments industry that ranks in the Bottom 29% of our Zacks Industry Rank. Over the last 60 days, no analyst has increased the earnings estimates for the current quarter, while one has dropped the estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 6 cents per share to a loss of 10 cents in that period.

Given the way analysts feel about Opko Health 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.

https://finance.yahoo.com/news/implied-volatility-surging-opko-health-135001079.html

Tip of the Hat to Smellybadger on IV

DISCLAIMER: Zacks ranks almost in the Cramer class for seldom being right in my worthless o0inion but they are hardly alone in smelling trouble or opportunity.

As for myself, I know nothing as members of the old Know Nothing Party were always instructed to say.

Best, Terry