The automated Quantcha Trade Ideas Service has detected a promising
WY was recently trading at $33.68 and has an implied volatility of 19.70% for this period. Based on an analysis of the options available for WY expiring on 20-Oct-2017, there is a 41.04% likelihood that the underlying will close within the analyzed range of $31.14-$38.06 at expiration. In this scenario, the average linear return for the trade would be 33.29%.
Price target: Zacks Research has updated their six-month price target for WY to $34.60. This price target is a consensus price created from the price targets published by 5 participating analysts whose targets ranged from $33.00 to $36.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for WY has been updated to 1.8, which indicates a buy consensus from analysts. Sentiment has moved from 2.14 to 2.14 to 2.14 over the past three months.
Trade approach: The difference between the current price for WY and the mean price target is $1.33, which represents a 2.75% move (5.65% annualized). Since the 180-day implied volatility for WY is 22.06%, 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 WEYERHAEUSER closed in the range $30.90-$38.10 on 20-Oct-2017. Based on our analysis, there is a 42.77% likelihood of this return. The maximum return for this trade would be 37.93% if WEYERHAEUSER closed in the range $32.00-$37.00.
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 3:18:31 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.