The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for PEPSICO () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
PEP was recently trading at $115.10 and has an implied volatility of 11.72% for this period. Based on an analysis of the options available for PEP expiring on 19-Jan-2018, there is a 42.95% likelihood that the underlying will close within the analyzed range of $115.11-$133.83 at expiration. In this scenario, the average linear return for the trade would be 58.73%.
Price target: Zacks Research has updated their six-month price target for PEP to 1.67. This price target is a consensus price created from the price targets published by 9 participating analysts whose targets ranged from $102.00 to $130.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for PEP has been updated to 1.65, which indicates a buy consensus from analysts. Sentiment has moved from 1.50 to 1.50 to 1.65 over the past three months.
Trade approach: The difference between the current price for PEP and the mean price target is $9.90, which represents a 5.70% move (11.91% annualized). Since the 180-day implied volatility for PEP is 13.03%, a bullish strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this bullish strategy, the trade would be profitable if PEPSICO closed at or above $113.15 on 19-Jan-2018. Based on our analysis, there is a 55.62% 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.
To analyze this trade in depth, please visit the .
This is an automated post generated based on a market analysis of delayed data at 7/10/2017 11:17:26 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.