The automated Quantcha Trade Ideas Service has detected a promising
DUK was recently trading at $82.04 and has an implied volatility of 12.02% for this period. Based on an analysis of the options available for DUK expiring on 20-Oct-2017, there is a 56.84% likelihood that the underlying will close within the analyzed range of $72.68-$88.83 at expiration. In this scenario, the average linear return for the trade would be 21.07%.
Price target: Zacks Research has updated their six-month price target for DUK to $80.75. This price target is a consensus price created from the price targets published by 8 participating analysts whose targets ranged from $72.00 to $88.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for DUK has been updated to 3.08, which indicates a hold consensus from analysts. Sentiment has moved from 2.73 to 2.79 to 3.00 over the past three months.
Trade approach: The difference between the current price for DUK and the mean price target is $0.54, which represents a 1.57% move (3.21% annualized). Since the 180-day implied volatility for DUK is 15.17%, 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 DUKE ENERGY closed in the range $71.15-$88.85 on 20-Oct-2017. Based on our analysis, there is a 61.11% likelihood of this return. The maximum return for this trade would be 21.95% if DUKE ENERGY 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.
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This is an automated post generated based on a market analysis of delayed data at 2/28/2017 11:21:43 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.