The old saying goes “with great risk comes great reward.”
That’s why traders are always searching for volatility. Whether they’re trading stocks or options, volatility is their friend.
Just make sure to set your stop losses to keep the opportunities open.
One sector that is hot right now is Oil and Gas. With oil prices continuing to rise playing volatile stocks in this market is a great way to find big profits.
Three volatile oil and gas plays to research include: Tellurian Inc. (Nasdaq: TELL), Allied Energy Corporation (OTC:AGYP), and Centennial Resource Development Inc. (Nasdaq: CDEV).
Options traders should pay close attention to Tellurian Inc. (Nasdaq: TELL) need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 21, 2022 $15.00 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.
Allied Energy Corporation (OTC:AGYP) made a 6,500% move from .0095 to .62 at the end of 2020 that’s what I call volatility. It’s safe to say when this stock gets some momentum it can really run.
Investors naturally took profits and the stock has settled around a 50% retracement at its current level. Now is a great time to start your research on AGYP because it could be set for a run that might even break through its 52 week high. Even if it were to reach its 52 week high of 62 cents that would be a nearly 100% gain!
AGYP is well positioned to breakout, just like it has in the past and with oil prices set to surge, the timing couldn’t be better.
Centennial Resource Development, Inc. (Nasdaq: CDEV) is up 700% from it’s 61 cent low in November. Currently settled around support the stock could either crash or shoot up to a new high.
Sean R. Smith, Chief Executive Officer, Matt R. Garrison, Chief Operating Officer, and George S. Glyphis, Chief Financial Officer, are scheduled to participate in the UBS Global Energy Conference today, which could bring some new blood into the stock causing a move. Monitor this closely.
