Implied Volatility Increase for Atlas Technical Consultants (ATCX) Stock Options


Investors in Atlas Technical Consultants, Inc. ATCX needs to pay close attention to the stock based on recent moves in the options market. Indeed, the $5.00 call on June 17, 2022 had one of the highest implied volatilities of any stock option today.

What is implied volatility?

Implied volatility shows the magnitude of the movements the market expects 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 that there is an upcoming event that could cause a big rally or a huge sale. However, implied volatility is only one piece of the puzzle when developing an options trading strategy.

What do analysts think?

Clearly, options traders are pricing a big move for Atlas Technical Consultants stock, but what is the fundamental picture for the company? Currently, Atlas Technical Consultants is a Zacks Rank #4 (Sales) in the Engineering – R&D Services industry which ranks in the bottom 35% of our Zacks Industry Rankings. In the last 60 days, no analyst raised their earnings estimates for the current quarter, while one analyst revised the estimate lower. The net effect lifted our Zacks consensus estimate for the current quarter from 13 cents per share to 7 cents during this period.

Given how analysts currently think of Atlas Technical Consultants, this huge implied volatility could mean a trade is developing. Often options traders look for options with high levels of implied volatility to sell at premiums. This is a strategy that many seasoned traders use because it captures the breakdown. At expiration, the hope of these traders is that the underlying stock does not move as much as originally expected.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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