Is the Options Market Predicting a Spike in Cenovus Energy Stock?

Investors in Cenovus Energy Inc. CVE need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 16, 2025 $35.00 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 Cenovus Energy share, but what is the fundamental picture for the company? Currently, Cenovus Energy is a Zacks Rank #3 (Hold) in the Oil and Gas - Integrated - Canadian Industrythat ranks in the Top 40% of our Zacks Industry Rank. Over the last 60days, no analyst has increased his estimate for the current quarter, while one has revised his estimate downward. The net effect has taken our Zacks Consensus Estimate for the current quarter to move from 24 cents to 20 cents in the same time period.Given the way analysts feel about Cenovus Energy right now, this huge implied volatility could mean there’s a trade developing. Often times, 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 >>#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>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 Cenovus Energy Inc (CVE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks