The automated Quantcha Trade Ideas Service has detected a promising
MT was recently trading at $8.39 and has an implied volatility of 42.87% for this period. Based on an analysis of the options available for MT expiring on 15-Sep-2017, there is a 20.83% likelihood that the underlying will close within the analyzed range of $9.48-$11.59 at expiration. In this scenario, the average linear return for the trade would be 160.12%.
Price target: Zacks Research has updated their six-month price target for MT to $10.54. This price target is a consensus price created from the price targets published by 5 participating analysts whose targets ranged from $8.50 to $12.18.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for MT has been updated to 1.88, which indicates a buy consensus from analysts. Sentiment has moved from 2.00 to 2.38 to 2.13 over the past three months.
Trade approach: The difference between the current price for MT and the mean price target is $2.62, which represents a 25.65% move (58.89% annualized). Since the 180-day implied volatility for MT is 42.10%, a bullish strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this bullish strategy, the trade would be profitable if ARCELORMITTAL closed at or above $9.36 on 15-Sep-2017. Based on our analysis, there is a 36.15% 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 3:18:24 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.