The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for CIGNA () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
CI was recently trading at $176.57 and has an implied volatility of 16.34% for this period. Based on an analysis of the options available for CI expiring on 19-Jan-2018, there is a 62.97% likelihood that the underlying will close within the analyzed range of $157.43-$192.42 at expiration. In this scenario, the average linear return for the trade would be 19.95%.
Price target: Zacks Research has updated their six-month price target for CI to $174.92. This price target is a consensus price created from the price targets published by 13 participating analysts whose targets ranged from $119.00 to $202.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for CI has been updated to 1.82, which indicates a buy consensus from analysts. Sentiment has moved from 1.79 to 1.79 to 1.77 over the past three months.
Trade approach: The difference between the current price for CI and the mean price target is $5.43, which represents a 0.93% move (1.90% annualized). Since the 180-day implied volatility for CI is 16.44%, 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 CIGNA closed in the range $156.56-$193.44 on 19-Jan-2018. Based on our analysis, there is a 65.49% likelihood of this return. The maximum return for this trade would be 20.77% if CIGNA closed in the range $160.00-$190.00.
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 8/8/2017 12:12:19 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.