$CZR/ Are Options Traders Betting on a Big Move in Caesars Entertainment (CZR) Stock?
Zacks
Zacks Equity Research
ZacksOctober 31, 2018
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Investors need to pay close attention to Caesars Entertainment (CZR) stock based on the movements in the options market lately.
More
Investors in Caesars Entertainment Corporation CZR need to pay close attention to the stock based on moves in the options market lately. That is because the Nov 2, 2018 $8.00 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 Caesars Entertainment shares, but what is the fundamental picture for the company? Currently, Caesars Entertainment is a Zacks Rank #4 (Sell) in the Gaming industry that ranks in the Bottom 7% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while two have revised the estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 4 cents per share to a loss of 3 cents in that period.
Given the way analysts feel about Caesars Entertainment 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.
Zacks
Zacks Equity Research
ZacksOctober 31, 2018
http://media.zenfs.com/en-US/homerun/zacks.com/465df5ce8169054ddfb8b3cf7c867e75">
https://s.yimg.com/ny/api/res/1.2/FziKHMMso8YAzu.PrueMPA--~A/YXBwaWQ9aGlnaGxhbmRlcjtzbT0xO3c9NjM1O2g9NDQ5/http://media.zenfs.com/en-US/homerun/zacks.com/465df5ce8169054ddfb8b3cf7c867e75
Investors need to pay close attention to Caesars Entertainment (CZR) stock based on the movements in the options market lately.
More
Investors in Caesars Entertainment Corporation CZR need to pay close attention to the stock based on moves in the options market lately. That is because the Nov 2, 2018 $8.00 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 Caesars Entertainment shares, but what is the fundamental picture for the company? Currently, Caesars Entertainment is a Zacks Rank #4 (Sell) in the Gaming industry that ranks in the Bottom 7% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while two have revised the estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 4 cents per share to a loss of 3 cents in that period.
Given the way analysts feel about Caesars Entertainment 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.
