The automated Quantcha Trade Ideas Service has detected a promising
AXP was recently trading at $80.07 and has an implied volatility of 16.61% for this period. Based on an analysis of the options available for AXP expiring on 7-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $79.95-$84.37 at expiration. In this scenario, the average linear return for the trade would be 67.23%.
52 week high: AMERICAN EXPRESS recently reached a new 52-week high at $80.49. AXP had traded in the range $54.81-$80.45 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 AXP maintains its current direction and does not revert back to pricing on the bearish side of $80.07 on 7-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 AMERICAN EXPRESS closes at or above $79.92 on 7-Apr-2017. Based on our risk-neutral analysis, there is a 50.25% 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 11:29:35 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.