The automated Quantcha Trade Ideas Service has detected a promising
UNH was recently trading at $166.04 and has an implied volatility of 14.56% for this period. Based on an analysis of the options available for UNH expiring on 7-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $165.83-$174.50 at expiration. In this scenario, the average linear return for the trade would be 54.60%.
52 week high: UNITEDHEALTH GROUP recently reached a new 52-week high at $166.50. UNH had traded in the range $118.97-$164.97 over the past year.
Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if UNH maintains its current direction and does not revert back to pricing on the bearish side of $166.04 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 bullish strategy, the trade would be profitable if UNITEDHEALTH GROUP closes at or above $165.63 on 7-Apr-2017. Based on our risk-neutral analysis, there is a 50.94% 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 11:27:39 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.