Implied Volatility Growth for Cushman & Wakefield (CWK) Stock Options.

Investors in Cushman and Wakefield CWK needs to pay close attention to the stock based on the movements in the options market lately. That’s because the August 18, 2023 $2.50 call had one of the highest implied volatilities of any stock option today.

What is implied volatility?

Implied volatility shows how much movement the market expects in the future. Options with high levels of implied volatility suggest that investors in the underlying stock are expecting a big move in one direction or another. It could also mean that an event will happen soon that can cause a big rally or a huge selloff. However, implied volatility is only one piece of the puzzle when building an options trading strategy.

What do analysts think?

Clearly, options traders are pricing in a big move for Cushman & Wakefield stock, but what is the fundamental picture for the company? Cushman & Wakefield currently holds a Zacks Rank 5 (Strong Sell) in the Real Estate Industry – Operations, which is in the bottom 16% of our Zacks Industry Rank. Over the past 60 days, no analysts have raised their earnings estimates for the current quarter, while two analysts have revised their estimates down. The net effect took our Zacks Consensus Estimate for the current quarter from 32 cents per share to 26 cents in that period.

Given how analysts now feel about Cushman & Wakefield, this huge implied volatility could mean there’s a deal brewing. Often, options traders look for options with high levels of implied volatility to sell premium. This is a strategy that many experienced traders use because it captures the decay. At expiration, the hope for these traders is that the underlying stock will not move as much as originally expected.

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