Do Options Traders Know Something About Tilray (TLRY) Stock We Don’t?

Investors in Tilray, Inc. TLRY need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 15, 2021 $20.00 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 Tilray shares, but what is the fundamental picture for the company? Currently, Tilray is a Zacks Rank #3 (Hold) in the Medical – Drugs industry that ranks in the Bottom 25% of our Zacks Industry Rank. Over the last 60 days, four analysts have increased the earnings estimates for the current quarter, while one has dropped the estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 23 cents per share to a loss of 21 cents in that period.

Given the way analysts feel about Tilray right now, this huge implied volatility could mean…

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