The automated Quantcha Trade Ideas Service has detected a promising
EMES was recently trading at $12.70 and has an implied volatility of 69.59% for this period. Based on an analysis of the options available for EMES expiring on 5-May-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $12.75-$18.33 at expiration. In this scenario, the average linear return for the trade would be 18.89%.
Big 8.36% Change: After closing the last trading session at $11.72, EMERGE ENERGY SERVICES LP opened today at $11.97 and has reached a high of $13.01.
Trade approach: A movement as big as 8.36% is a significantly bullish indicator, so this trade is designed to be profitable if EMES maintains its current direction and does not revert back to pricing on the bearish side of $12.70 on 5-May-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 EMERGE ENERGY SERVICES LP closes at or above $12.66 on 5-May-2017. Based on our risk-neutral analysis, there is a 50.74% 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 1:26:59 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.