The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for BAIDU () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
BIDU was recently trading at $223.94 and has an implied volatility of 29.09% for this period. Based on an analysis of the options available for BIDU expiring on 19-Jan-2018, there is a 38.71% likelihood that the underlying will close within the analyzed range of $174.60-$223.97 at expiration. In this scenario, the average linear return for the trade would be 80.44%.
Price target: Zacks Research has updated their six-month price target for BIDU to $194.00. This price target is a consensus price created from the price targets published by 9 participating analysts whose targets ranged from $126.00 to $250.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for BIDU has been updated to 2, which indicates a buy consensus from analysts. Sentiment has moved from 2.20 to 2.20 to 2.33 over the past three months.
Trade approach: The difference between the current price for BIDU and the mean price target is $23.94, which represents a 13.37% move (28.98% annualized). Since the 180-day implied volatility for BIDU is 28.88%, a bearish strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this bearish strategy, the trade would be profitable if BAIDU closed at or below $224.55 on 19-Jan-2018. Based on our analysis, there is a 48.71% 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 8/1/2017 10:27:00 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.