Is the Options Market Predicting a Spike in Meritage Homes Stock?

Investors in Meritage Homes Corporation MTH need to pay close attention to the stock based on moves in the options market lately. That is because the Jun 20, 2025 $50.00 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 Meritage Homes, but what is the fundamental picture for the company? Currently, Meritage Homes is a Zacks Rank #4 (Sell) in the Building Products- Home Builders industry that ranks in the Bottom 6% of our Zacks Industry Rank. Over the last 60days, no analyst has increased his estimate for the current quarter, while ten have revised their estimate downwards. The net effect has taken our Zacks Consensus Estimate for the current quarter to move from $2.41 per share to $1.99 in the same time period.Given the way analysts feel about Meritage Homes 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 >>Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.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 Meritage Homes Corporation (MTH): 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