The automated Quantcha Trade Ideas Service has detected a promising
SBGL was recently trading at $8.18 and has an implied volatility of 47.45% for this period. Based on an analysis of the options available for SBGL expiring on 21-Jul-2017, there is a 68.27% likelihood that the underlying will close within the analyzed range of $4.87-$13.93 at expiration. In this scenario, the average linear return for the trade would be 11.17%.
Moneyness: These options are currently 22.17% out of the money and there is a 30.73% likelihood that these options will be exercised before or at expiration.
Most upside: If SIBANYE GOLD LIMITED AMERICAN closes at or above $10.00, this trade could return up to 30.04%. Based on our analysis, there is a 35.62% likelihood of this return.
The downside: As with any covered call, the risk is substantial as it is vulnerable to a downturn in the underlying itself. There is a 44.78% chance the underlying will close at or below its breakeven price of $7.69, resulting in a net loss on the trade.
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This is an automated post generated based on a market analysis of delayed data at 2/28/2017 12:21:33 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.