Do Options Traders Know Something About DuPont (DD) Stock We Don't?

Investors in DuPont de Nemours, Inc. DD need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 20, 2023 $27.50 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 DuPont shares, but what is the fundamental picture for the company? Currently, DuPont is a Zacks Rank #4 (Sell) in the Chemical - Diversified industry that ranks in the Top 27% of our Zacks Industry Rank. Over the last 60 days, no analysts have increased their earnings estimates for the current quarter, while five analysts have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from 83 cents per share to 76 cents in that period.Given the way analysts feel about DuPont 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 >>Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 DuPont de Nemours, Inc. (DD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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