The automated Quantcha Trade Ideas Service has detected a promising
CTRP was recently trading at $49.68 and has an implied volatility of 28.88% for this period. Based on an analysis of the options available for CTRP expiring on 15-Sep-2017, there is a 34.91% likelihood that the underlying will close within the analyzed range of $49.37-$60.34 at expiration. In this scenario, the average linear return for the trade would be 68.73%.
Price target: Zacks Research has updated their six-month price target for CTRP to $54.86. This price target is a consensus price created from the price targets published by 7 participating analysts whose targets ranged from $41.00 to $60.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for CTRP has been updated to 1.69, which indicates a buy consensus from analysts. Sentiment has moved from 1.19 to 1.39 to 1.50 over the past three months.
Trade approach: The difference between the current price for CTRP and the mean price target is $7.32, which represents a 10.42% move (22.26% annualized). Since the 180-day implied volatility for CTRP is 29.61%, a neutral range-bound strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this neutral range-bound strategy, the trade would be profitable if CTRIP.COM INTERNATIONAL closed in the range $49.30-$60.70 on 15-Sep-2017. Based on our analysis, there is a 35.95% likelihood of this return. The maximum return for this trade would be 132.56% if CTRIP.COM INTERNATIONAL closed in the range $55.00-$55.00.
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 3:18:41 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.