The automated Quantcha Trade Ideas Service has detected a promising
AMGN was recently trading at $177.15 and has an implied volatility of 20.65% for this period. Based on an analysis of the options available for AMGN expiring on 21-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $177.69-$191.80 at expiration. In this scenario, the average linear return for the trade would be 63.24%.
52 week high: AMGEN recently reached a new 52-week high at $177.50. AMGN had traded in the range $133.64-$176.85 over the past year.
Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if AMGN maintains its current direction and does not revert back to pricing on the bearish side of $177.15 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 AMGEN closes at or above $176.01 on 21-Apr-2017. Based on our risk-neutral analysis, there is a 54.95% 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 11:28:10 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.