| Option traders are showing a bullish bias toward ManTech International Corporation (MANT). The implied volatility level for MANT calls is at 25.24, while the implied volatility level for MANT puts is at 22.26---giving the stock a volatility skew of 1.13. Learn how to use the volatility skew and other trading indicators in Learning Markets Options Coaching for Only $5. Any time we see a volatility skew above 1.00---like we are seeing for MANT---it is an indication that MANT calls are more expensive than MANT puts. Typically, when calls are more expensive than puts, it means the demand for calls is greater than the demand for puts because investors believe the stock is going to rise in the future and they want to take advantage of that movement by buying calls. The volatility skew for MANT is especially compelling because a reading of 1.13 shows that option traders are pushing prices to the extremes. Seeing the volatility skew on MANT, you may also want to look at a few of the other stocks in the Business Software & Services industry. Oftentimes, stocks within the same industry group are affected by the same fundamental factors and tend to move together. Jack Henry & Associates Inc. (JKHY) and Amdocs Ltd. (DOX)---which are both part of the Business Software & Services industry. Of course, the volatility skew for MANT may only be showing a bullish bias due to forces that only affect this stock. In that case, if you want to be more conservative in your option trading, you may want to look at doing a pairs trade---buying a call on one stock and buying a put on the other stock---between MANT and DOX or between MANT and JKHY to hedge some of the risk you may take on by trading MANT alone. On the other hand, seeing that MANT's volatility skew is showing a bullish bias, you may also want to look at employing one of the following strategies: - Buying a call - Selling a naked put - Buy a vertical call spread Want to learn how to trade these strategies? Check out Learning Markets Options Coaching for Only $5.
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