Seeing the FutureA good example is Boston Scientific ( BSX), which has seen its implied volatility climb into the 70% range, or more than double its three-year historical average, in recent weeks. The reason is that on May 21, the company will be presenting an update on its Taxus stent clinical program.
|North for Boston |
With the stock climbing, an options strategy could come into play
If you believe that no matter what the report brings, the shares will stay within a defined range and implied volatility will decline, then you might just want to consider the outright sale of premium. A short sale of a straddle (selling both the put and the call with the same strike and expiration) or a strangle (sale of a put and a call with a different strike but the same expiration) are two such strategies.