The automated Quantcha Trade Ideas Service has detected a promising
ALJ was recently trading at $12.51 and has an implied volatility of 35.46% for this period. Based on an analysis of the options available for ALJ expiring on 21-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $12.38-$14.40 at expiration. In this scenario, the average linear return for the trade would be 24.83%.
Big 7.43% Change: After closing the last trading session at $11.64, ALON USA ENERGY opened today at $11.60 and has reached a high of $12.61.
Trade approach: A movement as big as 7.43% is a significantly bullish indicator, so this trade is designed to be profitable if ALJ maintains its current direction and does not revert back to pricing on the bearish side of $12.51 on 21-Apr-2017. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bullish strategy, the trade would be profitable if ALON USA ENERGY closes at or above $12.00 on 21-Apr-2017. Based on our risk-neutral analysis, there is a 58.22% likelihood of this return.
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 12:26:22 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.