The automated Quantcha Trade Ideas Service has detected a promising
CARA was recently trading at $19.85 and has an implied volatility of 67.03% for this period. Based on an analysis of the options available for CARA expiring on 21-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $19.86-$24.38 at expiration. In this scenario, the average linear return for the trade would be 52.92%.
Big 9.37% Change: After closing the last trading session at $18.15, CARA THERAPEUTICS INC. COMMON opened today at $20.24 and has reached a high of $20.24.
Trade approach: A movement as big as 9.37% is a significantly bullish indicator, so this trade is designed to be profitable if CARA maintains its current direction and does not revert back to pricing on the bearish side of $19.85 on 21-Apr-2017. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bullish strategy, the trade would be profitable if CARA THERAPEUTICS INC. COMMON closes at or above $19.70 on 21-Apr-2017. Based on our risk-neutral analysis, there is a 51.58% likelihood of this return.
Downside risk: As with any options trade, there is a substantial downside risk where you may lose most or all of your investment.
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This is an automated post generated based on a market analysis of delayed data at 3/28/2017 1:26:50 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.