Send me real-time posts from this site at my email
Zacks

Are Options Traders Betting on a Big Move in Petroleo Brasileiro (PBR) Stock?

Investors in Petróleo Brasileiro S.A. - Petrobras PBR need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 21, 2022 $4.00 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 Petróleo Brasileiro shares, but what is the fundamental picture for the company? Currently, Petróleo Brasileiro is a Zacks Rank #3 (Hold) in the Oil and Gas - Integrated - Emerging Markets industry that ranks in the Bottom  12% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while none have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 90 cents per share to $1.14 in that period.

Given the way analysts feel about Petróleo Brasileiro 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.

Click to see the trades now >>
 


This Little-Known Semiconductor Stock Could Be Your Portfolio’s Hedge Against Inflation

Everyone uses semiconductors. But only a small number of people know what they are and what they do. If you use a smartphone, computer, microwave, digital camera or refrigerator (and that’s just the tip of the iceberg), you have a need for semiconductors. That’s why their importance can’t be overstated and their disruption in the supply chain has such a global effect. But every cloud has a silver lining. Shockwaves to the international supply chain from the global pandemic have unearthed a tremendous opportunity for investors. And today, Zacks' leading stock strategist is revealing the one semiconductor stock that stands to gain the most in a new FREE report. It's yours at no cost and with no obligation.

>>Yes, I Want to Help Protect My Portfolio During the Recession

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
 
Petroleo Brasileiro S.A. Petrobras (PBR): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue