The automated Quantcha Trade Ideas Service has detected a promising
ETFC was recently trading at $34.51 and has an implied volatility of 27.76% for this period. Based on an analysis of the options available for ETFC expiring on 7-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $31.64-$34.59 at expiration. In this scenario, the average linear return for the trade would be 65.58%.
Big -7.24% Change: After closing the last trading session at $37.20, E*TRADE FINANCIAL CORP opened today at $34.74 and has reached a low of $34.47.
Trade approach: A movement as big as -7.24% is a significantly bearish indicator, so this trade is designed to be profitable if ETFC maintains its current direction and does not revert back to pricing on the bullish side of $34.51 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 bearish strategy, the trade would be profitable if E*TRADE FINANCIAL CORP closes at or below $34.63 on 7-Apr-2017. Based on our risk-neutral analysis, there is a 50.49% 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 12:25:55 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.