American Coastal Insurance (ACIC) Options Traders Bet on Big Move

Options traders are betting on a big move in American Coastal Insurance (ACIC) stock, with the August 15, 2025 $7.5 Call having high implied volatility. Implied volatility suggests investors expect a significant movement in the stock. Analysts rank the insurance company as a Zacks Rank #4 (Sell) in the Insurance - Property and Casualty industry, with no earnings estimate increases over the last 60 days. Options traders often sell premium, capturing decay, and hoping the underlying stock doesn't move as much as expected.

Investors in American Coastal Insurance Corporation (ACIC) should pay close attention to the stock based on recent moves in the options market. The August 15, 2025 $7.5 Call option has shown some of the highest implied volatility among equity options today [1]. Implied volatility is a measure of how much movement the market expects in the future. High implied volatility suggests that investors in the underlying stock are expecting a significant move in one direction or the other, or that an event may cause a big rally or sell-off.

Analysts rank American Coastal Insurance as a Zacks Rank #4 (Sell) in the Insurance - Property and Casualty industry, placing it in the Top 19% of our Zacks Industry Rank. Over the last 60 days, no analyst has increased the earnings estimates for the current quarter, while one has dropped the estimates. This has taken our Zacks Consensus Estimate for the current quarter from 40 cents per share to 38 cents [1]. Given the analysts' sentiment, the high implied volatility could indicate a developing trade.

Options traders often look for options with high levels of implied volatility to sell premium. This strategy captures decay, as the hope is that the underlying stock does not move as much as originally expected. On May 15, 2025, Sherrill Hudson, a director at ACIC, purchased 10,000 shares of the company, adding to the insider's total holdings [2]. This activity is part of a broader insider transaction trend at ACIC, where there have been three insider buys and six insider sells over the past year. The company's price-earnings ratio stands at 7.19, which is lower than the industry median of 12.5 and also below its historical median price-earnings ratio. The stock is fairly valued based on its GF Value of $10.21.

References:
[1] https://www.nasdaq.com/articles/are-options-traders-betting-big-move-american-coastal-insurance-acic-stock
[2] https://www.gurufocus.com/news/2875149/insider-buying-sherrill-hudson-acquires-shares-in-american-coastal-insurance-corp-acic