The automated Quantcha Trade Ideas Service has detected a promising
CYH was recently trading at $8.94 and has an implied volatility of 75.77% for this period. Based on an analysis of the options available for CYH expiring on 28-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $6.75-$8.97 at expiration. In this scenario, the average linear return for the trade would be 20.32%.
Big -7.26% Change: After closing the last trading session at $9.64, COMMUNITY HEALTH SYSTEMS opened today at $9.58 and has reached a low of $8.81.
Trade approach: A movement as big as -7.26% is a significantly bearish indicator, so this trade is designed to be profitable if CYH maintains its current direction and does not revert back to pricing on the bullish side of $8.94 on 28-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 COMMUNITY HEALTH SYSTEMS closes at or below $9.09 on 28-Apr-2017. Based on our risk-neutral analysis, there is a 51.85% 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 12:24:04 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.