The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for BANK OF MONTREAL () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
BMO was recently trading at $74.16 and has an implied volatility of 13.78% for this period. Based on an analysis of the options available for BMO expiring on 19-Jan-2018, there is a 47.43% likelihood that the underlying will close within the analyzed range of $74.19-$90.68 at expiration. In this scenario, the average linear return for the trade would be 43.72%.
Price target: Zacks Research has updated their six-month price target for BMO to $82.44. This price target is a consensus price created from the price targets published by 5 participating analysts whose targets ranged from $74.00 to $108.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for BMO has been updated to 2.63, which indicates a hold consensus from analysts. Sentiment has moved from 2.80 to 2.63 to 2.57 over the past three months.
Trade approach: The difference between the current price for BMO and the mean price target is $1.32, which represents a 11.16% move (23.93% annualized). Since the 180-day implied volatility for BMO is 14.56%, a bullish strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this bullish strategy, the trade would be profitable if BANK OF MONTREAL closed at or above $73.45 on 19-Jan-2018. Based on our analysis, there is a 53.60% 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.
To analyze this trade in depth, please visit the .
This is an automated post generated based on a market analysis of delayed data at 8/9/2017 11:18:33 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.