The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for LLOYDS BANKING GROUP () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
LYG was recently trading at $3.52 and has an implied volatility of 23.88% for this period. Based on an analysis of the options available for LYG expiring on 19-Jan-2018, there is a 45.27% likelihood that the underlying will close within the analyzed range of $2.52-$3.53 at expiration. In this scenario, the average linear return for the trade would be 22.35%.
Price target: Zacks Research has updated their six-month price target for LYG to $2.80. This price target is a consensus price created from the price targets published by 1 participating analysts whose targets ranged from $2.80 to $2.80.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for LYG has been updated to 3, which indicates a hold consensus from analysts. Sentiment has moved from 2.00 to 2.00 to 3.00 over the past three months.
Trade approach: The difference between the current price for LYG and the mean price target is $0.72, which represents a 20.45% move (45.84% annualized). Since the 180-day implied volatility for LYG is 26.26%, a bearish strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this bearish strategy, the trade would be profitable if LLOYDS BANKING GROUP closed at or below $3.57 on 19-Jan-2018. Based on our analysis, there is a 50.82% 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 8/1/2017 11:15:24 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.