High Implied Volatility and Mixed Analyst Opinions: A Trading Opportunity for Align Technology Investors?

In light of recent activity in the options market, investors in Align Technology, Inc. (ALGN) should closely monitor their stock holdings. Specifically, the Sep 09, 2024 $170 Call option has one of the highest implied volatility levels among all equity options today. Implied volatility is an indicator of how much investors expect a stock’s price to move in the near future. High levels of implied volatility suggest that significant price changes are expected.

In addition to implied volatility, analyst opinions on Align Technology are also important to consider. The company currently holds a Zacks Rank #3 (Hold) in the Medical-Dental Supplies industry, ranking within the Bottom 32% of our Zacks Industry Rank. Analysts have recently adjusted their earnings estimates for the current quarter, with two increasing their estimates and four decreasing them. The Zacks Consensus Estimate for the current quarter has shifted from $2.39 per share to $2.33 per share over the past 60 days.

Given these mixed analyst sentiment and high implied volatility, there may be a trading opportunity developing for Align Technology investors. Options traders often look for options with high implied volatility to sell premium, capturing decay. This strategy can be particularly attractive to experienced traders who seek to profit from underperformance by expiration date.

If you’re interested in trading options, consider following in the footsteps of Zacks Executive VP Kevin Matras who has secured double and triple-digit winners using this approach. These trades offer significant profit potential while reducing risk. For more information on stock recommendations from Zacks Investment Research, download our latest report: “The 7 Best Stocks for the Next 30 Days.”