The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for CHARLES SCHWAB () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
SCHW was recently trading at $42.97 and has an implied volatility of 23.64% for this period. Based on an analysis of the options available for SCHW expiring on 19-Jan-2018, there is a 42.40% likelihood that the underlying will close within the analyzed range of $41.58-$50.82 at expiration. In this scenario, the average linear return for the trade would be 51.13%.
Price target: Zacks Research has updated their six-month price target for SCHW to $46.20. This price target is a consensus price created from the price targets published by 10 participating analysts whose targets ranged from $35.00 to $51.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for SCHW has been updated to 1.88, which indicates a buy consensus from analysts. Sentiment has moved from 1.54 to 1.54 to 1.54 over the past three months.
Trade approach: The difference between the current price for SCHW and the mean price target is $4.53, which represents a 7.52% move (15.83% annualized). Since the 180-day implied volatility for SCHW is 24.11%, a neutral range-bound strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this neutral range-bound strategy, the trade would be profitable if CHARLES SCHWAB closed in the range $41.20-$51.80 on 19-Jan-2018. Based on our analysis, there is a 47.20% likelihood of this return. The maximum return for this trade would be 56.25% if CHARLES SCHWAB closed in the range $43.00-$50.00.
Downside risk: As with any options trade, there is a substantial downside risk where you may lose most or all of your investment.
To analyze this trade in depth, please visit the .
This is an automated post generated based on a market analysis of delayed data at 7/26/2017 11:17:51 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.