The automated Quantcha Trade Ideas Service has detected a promising
JD was recently trading at $31.57 and has an implied volatility of 30.71% for this period. Based on an analysis of the options available for JD expiring on 15-Sep-2017, there is a 36.53% likelihood that the underlying will close within the analyzed range of $29.45-$36.00 at expiration. In this scenario, the average linear return for the trade would be 93.04%.
Price target: Zacks Research has updated their six-month price target for JD to $32.73. This price target is a consensus price created from the price targets published by 11 participating analysts whose targets ranged from $21.00 to $40.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for JD has been updated to 1.8, which indicates a buy consensus from analysts. Sentiment has moved from 1.95 to 1.88 to 2.00 over the past three months.
Trade approach: The difference between the current price for JD and the mean price target is $1.43, which represents a 3.66% move (7.57% annualized). Since the 180-day implied volatility for JD is 30.84%, 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 JD SPORTS FASHION closed in the range $29.42-$36.58 on 15-Sep-2017. Based on our analysis, there is a 39.23% likelihood of this return. The maximum return for this trade would be 111.27% if JD SPORTS FASHION closed in the range $31.00-$35.00.
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 12:21:45 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.