Is the Options Market Predicting a Spike in Affiliated Managers Group Stock?
Investors in Affiliated Managers Group, Inc. AMG need to pay close attention to the stock based on moves in the options market lately. That is because the June 20, 2025 $110 Put had some of the highest implied volatility of all equity options today.
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.
Clearly, options traders are pricing in a big move for Affiliated Managers Group shares, but what is the fundamental picture for the company? Currently, Affiliated Managers Group is a Zacks Rank #1 (Strong Buy) in the Financial - Investment Management industry that ranks in the Bottom 39% of our Zacks Industry Rank. Over the last 60 days, three analysts have increased their earnings estimates for the current quarter, while none dropped the estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from $5.04 per share to $5.19 in that period.
Given the way analysts feel about Affiliated Managers Group right now, this huge implied volatility could mean there's a trade developing. Oftentimes, 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.
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.
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