Cheniere Energy, Inc. (LNG) share prices are compressed: and volatility expectations are low. Because volatility expect Cheniere Energy, Inc. (LNG) share prices are compressed: and volatility expectations are low. Because volatility expectations are a measure of relative price, this means current options prices are also low. This natural gas producer has a long history of making bigger-than-expected moves after a compression signal. LNG is also sensitive to natural gas prices. If, you’ve been following the Energy Information Administration (EIA) Natural Gas Report that we frequently post as a news item to watch in the ODDS Online Community, you may already know that natural gas recently fell to a 25-year low in March. Prices have been rising ever since. This MDM graph compares the modeled expectations of current options prices (the orange line) to the actual movement of LNG’s stock price over the past two years. You can see that the actual behavior (the blue histogram) made big moves up and down far more frequently than the modeled options prices expect. This tells us that LNG options for July 19th expiration are relatively inexpensive.
This [Volatility Cone]( graph is showing us that volatility expectations (the yellow dots) are all below the two-year average. To learn more about the Volatility Cone, click [here](. In fact, the current volatility expectations are closer to the extreme low historical volatility over the past two years. This confirms that options prices at every expiration are low. This [Volatility Term Structure]( chart is showing us that volatility expectations and options prices are the lowest for the July 12th expiration, but we will still have low options prices and better liquidity at the July 19th expiration. To learn more about Volatility Term Structure, click [here](. Because we are interested in buying options, we will use the expiration with the better liquidity of July 19th for our strategies. LNG’s stock price is compressed, and options prices are relatively cheap. With rising natural gas prices and LNG’s tendency to make big moves after a compression signal, we have an option buying situation. Be sure to read the ODDS Online Daily Trade Idea report to get the details of our trade ideas for LNG options today. To access Odds Online Daily and be able to see any stock you are tracking in this software, click [here](. Thank you, Don Fishback --------------------------------------------------------------- See Related Articles on [TradewinsDaily.com]( [Cheniere Energy, Inc. (LNG), Trending Stock Report]( [Chart of Day: Nvidia (NVDA) Already Pushing Higher]( [When To Pull The Trigger On A Trade]( [Buying Pressure Surges for DaVita Inc.]( [JP Morgan Chase & Co. (JPM), Trending Stock Report]( ---------------------------------------------------------------
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