The automated Quantcha Trade Ideas Service has detected a promising
KR was recently trading at $29.09 and has an implied volatility of 22.71% for this period. Based on an analysis of the options available for KR expiring on 20-Oct-2017, there is a 25.32% likelihood that the underlying will close within the analyzed range of $31.95-$39.05 at expiration. In this scenario, the average linear return for the trade would be 238.90%.
Price target: Zacks Research has updated their six-month price target for KR to $35.50. This price target is a consensus price created from the price targets published by 14 participating analysts whose targets ranged from $30.00 to $40.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for KR has been updated to 2.14, which indicates a buy consensus from analysts. Sentiment has moved from 2.08 to 2.14 to 2.14 over the past three months.
Trade approach: The difference between the current price for KR and the mean price target is $5.92, which represents a 22.06% move (49.80% annualized). Since the 180-day implied volatility for KR is 23.50%, 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 KROGER closed at or above $31.60 on 20-Oct-2017. Based on our analysis, there is a 32.50% 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 2:20:07 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.