The automated Quantcha Trade Ideas Service has detected a promising
MNKD was recently trading at $1.68 and has an implied volatility of 81.07% for this period. Based on an analysis of the options available for MNKD expiring on 5-May-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $1.18-$1.68 at expiration. In this scenario, the average linear return for the trade would be 35.68%.
Big -7.97% Change: After closing the last trading session at $1.82, MANNKIND opened today at $1.80 and has reached a low of $1.67.
Trade approach: A movement as big as -7.97% is a significantly bearish indicator, so this trade is designed to be profitable if MNKD maintains its current direction and does not revert back to pricing on the bullish side of $1.68 on 5-May-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 MANNKIND closes at or below $1.79 on 5-May-2017. Based on our risk-neutral analysis, there is a 57.02% 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 3/28/2017 1:27:10 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.