The automated Quantcha Trade Ideas Service has detected a promising
HSNI was recently trading at $37.60 and has an implied volatility of 27.90% for this period. Based on an analysis of the options available for HSNI expiring on 21-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $33.39-$37.44 at expiration. In this scenario, the average linear return for the trade would be 12.87%.
Big -7.16% Change: After closing the last trading session at $40.50, HSN opened today at $40.45 and has reached a low of $37.60.
Trade approach: A movement as big as -7.16% is a significantly bearish indicator, so this trade is designed to be profitable if HSNI maintains its current direction and does not revert back to pricing on the bullish side of $37.60 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 bearish strategy, the trade would be profitable if HSN closes at or below $38.05 on 21-Apr-2017. Based on our risk-neutral analysis, there is a 55.67% 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 1:23:43 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.