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On Tuesday, Benzinga spoke with TD Ameritrade Chief Strategist JJ Kinahan about options activity in a few stocks ahead of earnings.
The expert first looked into Chipotle Mexican Grill, Inc. (NYSE: CMG), which doesn’t trade a lot of options, actually. However, he notes it is trading more than normal, about double its usual amount of options at the time, but it is “starting from a low level.”
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An interesting thing is that the implied volatility is at 85 percent per year. So, although investors can expect a 7.6 percent move, they will still see a high percent trial.
Regarding GoPro Inc (NASDAQ: GPRO), Kinahan told Benzinga that he expects to see a move of approximately 13 percent, adding that “the options market is pricing quite a bit there.”
What’s interesting is that, on Tuesday, TD Ameritrade saw some sellers of the $68 and $69 calls. However, Kinahan explained, this is not necessarily a bearish signal. This could also be interpreted as people who are taking advantage of the elevated implied volatility.
Then, in August, the firm has seen sellers of the $50.50 puts, part of this being that, while investors are expecting a big move, they are taking advantage of this by selling some premium way out-of-the-money.
The strategist then went into Intuitive Surgical, Inc. (NASDAQ: ISRG), which is expecting about a 6.2 percent move. Once again, this is not a big options trader, he clarified.
The stock hasn’t moved much recently, he noted. However, historical volatility stands around 10 percent, and the buy volatility, around the 48 percentile. So, investors can expect a significant move, much more than what they have seen recently.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.