The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for WAL-MART STORES () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
WMT was recently trading at $80.40 and has an implied volatility of 18.28% for this period. Based on an analysis of the options available for WMT expiring on 19-Jan-2018, there is a 59.44% likelihood that the underlying will close within the analyzed range of $72.40-$88.48 at expiration. In this scenario, the average linear return for the trade would be 26.97%.
Price target: Zacks Research has updated their six-month price target for WMT to $80.44. This price target is a consensus price created from the price targets published by 20 participating analysts whose targets ranged from $58.00 to $90.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for WMT has been updated to 2.27, which indicates a buy consensus from analysts. Sentiment has moved from 2.39 to 2.30 to 2.33 over the past three months.
Trade approach: The difference between the current price for WMT and the mean price target is $1.10, which represents a 0.05% move (0.10% annualized). Since the 180-day implied volatility for WMT is 17.97%, 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 WAL-MART STORES closed in the range $70.89-$89.11 on 19-Jan-2018. Based on our analysis, there is a 65.45% likelihood of this return. The maximum return for this trade would be 27.33% if WAL-MART STORES closed in the range $72.50-$87.50.
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 9:36:35 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.