The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for MORGAN STANLEY () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
MS was recently trading at $46.70 and has an implied volatility of 23.14% for this period. Based on an analysis of the options available for MS expiring on 19-Jan-2018, there is a 47.59% likelihood that the underlying will close within the analyzed range of $41.73-$51.00 at expiration. In this scenario, the average linear return for the trade would be 68.68%.
Price target: Zacks Research has updated their six-month price target for MS to $46.36. This price target is a consensus price created from the price targets published by 11 participating analysts whose targets ranged from $33.00 to $61.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for MS has been updated to 2.2, which indicates a buy consensus from analysts. Sentiment has moved from 2.25 to 2.20 to 2.29 over the past three months.
Trade approach: The difference between the current price for MS and the mean price target is $1.30, which represents a 0.72% move (1.47% annualized). Since the 180-day implied volatility for MS is 23.84%, 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 MORGAN STANLEY closed in the range $41.68-$51.32 on 19-Jan-2018. Based on our analysis, there is a 49.16% likelihood of this return. The maximum return for this trade would be 117.39% if MORGAN STANLEY closed in the range $46.00-$47.00.
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 8/14/2017 12:08:42 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.