investors in Sabra Health Care sbra The stock deserves a closer look based on the recent moves in the options market. This is because the April 21, 2023 $2.50 Call AD has 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 indicate that investors are expecting a large move in one direction or the other in the underlying stock. It could also mean that some event is going to happen soon that could lead to a big rally or a massive selloff. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do analysts think?
Clearly, options traders are pricing in a big move for Sabra Health Care shares, but what’s the fundamental picture for the company? Currently, Sabra Health Care REIT & Equity Trust has a Zacks Rank #3 (Hold) – another industry that ranks in the bottom 34% of our Zacks Industry Ranks. Over the past 60 days, no analyst has raised their earnings estimates for the current quarter, while one analyst has revised the estimate downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from 36 cents per share to 35 cents over that period.
Given the way analysts are feeling about Sabra Health Care right now, this heavy implied volatility could mean that there’s a trade developing. Often, options traders look for options with high levels of implied volatility to sell for a premium. This is a strategy that many experienced traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not rise as much as originally expected.
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Sabra Healthcare REIT, Inc. (SBRA): Free Stock Analysis Report
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The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.