Low implied volatility in market, investors advised to focus on long volatility trades

From Nasdaq: 2024-05-28 08:36:00

Market volatility is at a six-month low, with many stocks showing low implied volatility percentiles. Palantir (PLTR) has an implied volatility of 37%, compared to a twelve-month low of 37% and a high of 61%. Implied volatility percentile is a common metric used in options trading, comparing current implied volatility to past ranges.

To find stocks with low implied volatility percentiles, the Stock Screener can be utilized with filters like Total Options Volume > 2,000, Market Cap > 40 billion, and IV Percentile < 15%. Some stocks with low IV Percentile include Conocophillips (COP), Doordash (DASH), and Datadog (DDOG). When implied volatility is low, focusing on long volatility trades like debit spreads and long straddles is advised. Comparing a stock's IV Percentile to the overall market can provide insights into when to buy volatility. Earnings dates can also impact stock volatility, so it's crucial to stay informed and consult a financial advisor before making investment decisions.


Read more at Nasdaq: Low Implied Volatility Alert: Stocks to Watch Right Now