The automated Quantcha Trade Ideas Service has detected a promising
MOMO was recently trading at $26.61 and has an implied volatility of 66.17% for this period. Based on an analysis of the options available for MOMO expiring on 21-Jul-2017, there is a 68.27% likelihood that the underlying will close within the analyzed range of $17.71-$40.54 at expiration. In this scenario, the average linear return for the trade would be 10.62%.
Moneyness: These options are currently 12.70% out of the money and there is a 37.83% likelihood that these options will be exercised before or at expiration.
Most upside: If MOMO INC. AMERICAN DEPOSITARY closes at or above $30.00, this trade could return up to 24.33%. Based on our analysis, there is a 39.25% likelihood of this return.
The downside: As with any covered call, the risk is substantial as it is vulnerable to a downturn in the underlying itself. There is a 40.01% chance the underlying will close at or below its breakeven price of $24.13, resulting in a net loss on the trade.
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This is an automated post generated based on a market analysis of delayed data at 2/28/2017 1:18:51 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.