The automated Quantcha Trade Ideas Service has detected a promising
ERX was recently trading at $33.34 and has an implied volatility of 55.84% for this period. Based on an analysis of the options available for ERX expiring on 21-Jul-2017, there is a 68.27% likelihood that the underlying will close within the analyzed range of $23.40-$48.13 at expiration. In this scenario, the average linear return for the trade would be 10.28%.
Moneyness: These options are currently 22.98% out of the money and there is a 27.31% likelihood that these options will be exercised before or at expiration.
Most upside: If DIREXION DAILY ENERGY BULL 3X closes at or above $41.00, this trade could return up to 30.16%. Based on our analysis, there is a 28.93% 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 43.02% chance the underlying will close at or below its breakeven price of $31.50, 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 1:19:21 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.