Buyers in Magnolia Oil & Fuel Company MGY have to pay shut consideration to the inventory based mostly on strikes within the choices market recently. That’s as a result of the March 21, 2025 $15 Name had among the highest implied volatility of all fairness choices at this time.
What’s Implied Volatility?
Implied volatility exhibits how a lot motion the market is anticipating sooner or later. Choices with excessive ranges of implied volatility counsel that traders within the underlying shares expect an enormous transfer in a single route or the opposite. It may additionally imply there’s an occasion arising quickly which will trigger an enormous rally or an enormous sell-off. Nevertheless, implied volatility is just one piece of the puzzle when placing collectively an choices buying and selling technique.
What do the Analysts Suppose?
Clearly, choices merchants are pricing in an enormous transfer for Magnolia Oil & Fuel shares, however what’s the elementary image for the corporate? Presently, Magnolia Oil & Fuel is a Zacks Rank #3 (Maintain) within the Oil and Fuel – Exploration and Manufacturing – United States business that ranks within the High 23% of our Zacks Trade Rank. Over the past 60 days, two analysts have elevated their earnings estimates for the present quarter, whereas three have dropped their estimates. The online impact has taken our Zacks Consensus Estimate for the present quarter from 47 cents per share to 46 cents in that interval.
Given the best way analysts really feel about Magnolia Oil & Fuel proper now, this large implied volatility may imply there’s a commerce creating. Oftentimes, choices merchants search for choices with excessive ranges of implied volatility to promote premium. It is a technique many seasoned merchants use as a result of it captures decay. At expiration, the hope for these merchants is that the underlying inventory doesn’t transfer as a lot as initially anticipated.
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Magnolia Oil & Gas Corp (MGY) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
