The automated Quantcha Trade Ideas Service has detected a promising
HCA was recently trading at $88.74 and has an implied volatility of 24.77% for this period. Based on an analysis of the options available for HCA expiring on 15-Sep-2017, there is a 44.07% likelihood that the underlying will close within the analyzed range of $83.08-$101.54 at expiration. In this scenario, the average linear return for the trade would be 21.60%.
Price target: Zacks Research has updated their six-month price target for HCA to $92.31. This price target is a consensus price created from the price targets published by 16 participating analysts whose targets ranged from $78.00 to $100.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for HCA has been updated to 1.72, which indicates a buy consensus from analysts. Sentiment has moved from 1.88 to 1.72 to 1.72 over the past three months.
Trade approach: The difference between the current price for HCA and the mean price target is $5.76, which represents a 4.03% move (8.33% annualized). Since the 180-day implied volatility for HCA is 24.93%, 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 HCA HOLDINGS closed in the range $82.20-$102.80 on 15-Sep-2017. Based on our analysis, there is a 48.44% likelihood of this return. The maximum return for this trade would be 22.95% if HCA HOLDINGS closed in the range $85.00-$100.00.
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 2:19:26 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.