Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • AUD/USD

    0.6516
    -0.0002 (-0.03%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • Bitcoin AUD

    107,386.83
    -1,010.02 (-0.93%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6040
    +0.0006 (+0.10%)
     
  • AUD/NZD

    1.0898
    -0.0004 (-0.04%)
     
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     

Is the Options Market Predicting a Spike in Five9 (FIVN) Stock?

Investors in Five9, Inc. FIVN need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 21, 2022 $75.00 Put 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 Five9 shares, but what is the fundamental picture for the company? Currently, Five9 is a Zacks Rank #4 (Sell) in the Internet - Software industry that ranks in the Bottom 29% of our Zacks Industry Rank. Over the last 60 days, six analysts have increased their earnings estimates for the current quarter, while one has dropped the estimate. The net effect has taken our Zacks Consensus Estimate for the current quarter from 35 cents per share to 36 cents in that period.

Given the way analysts feel about Five9 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.

Looking to Trade Options?

Check out the simple yet high-powered approach that Zacks Executive VP Kevin Matras has used to close recent double and triple-digit winners. In addition to impressive profit potential, these trades can actually reduce your risk.

ADVERTISEMENT

Click to see the trades now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Five9, Inc. (FIVN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.