Energy Stock to Watch Amid the Sector Buzz

BTU is seeing attractively priced options at the moment

Sep 6, 2022 at 1:19 PM
facebook X logo linkedin

Despite seeing strong price action of late, the energy sector appears to be far from overcrowded, with the Wall Street Journal recently reporting Bank of America clients were net sellers of energy-related names for two consecutive weeks. One stock in particular that could present a good opportunity within that sector is Peabody Energy Corp (NYSE:BTU), which has potential support from its half-all time highs near the $22 area, as well as breakout level from a trendline connecting lower highs in mid-August, and the 80-day moving average after its latest crossover.


BTU wt repost

Peabody Energy stock seems to be flying under analysts’ radars, too, given not many firms cover the equity. And despite its more than 140% year-to-date lead, two of five analysts still call it a tepid “hold,” leaving plenty of room for upgrades. The security is heavily shorted, too, with short interest up 150% so far this year, and now making up 11.9% of the stock’s available float. This implies shorts are losing the battle, making them less likely to increase exposure. In fact, pullbacks like these are viewed as opportunities to cover and control the bleed.
Options are very affordable at the moment, per BTU’s Schaeffer's Volatility Index (SVI) of 80%, which sits in the low 7th percentile of its annual range. In other words, options traders are pricing in extremely low volatility expectations at the moment. The stock’s implied volatility (IV) of 86% is a bargain as well, compared to its historical volatility of 94%.
The security has frequently exceeded option traders' volatility expectations during the past year, pet its Schaeffer's Volatility Scorecard (SVS), which sits at an elevated 71 out of 100. Our recommended call option has a leverage ratio of 2.9, and will double in value on a 38.5% rise in the underlying equity.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this BTU commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI