The automated Quantcha Trade Ideas Service has detected a promising
ICE was recently trading at $59.93 and has an implied volatility of 18.11% for this period. Based on an analysis of the options available for ICE expiring on 15-Sep-2017, there is a 52.38% likelihood that the underlying will close within the analyzed range of $56.70-$69.30 at expiration. In this scenario, the average linear return for the trade would be 16.28%.
Price target: Zacks Research has updated their six-month price target for ICE to $63.00. This price target is a consensus price created from the price targets published by 10 participating analysts whose targets ranged from $56.40 to $66.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for ICE has been updated to 1.5, which indicates a buy consensus from analysts. Sentiment has moved from 1.75 to 1.64 to 1.64 over the past three months.
Trade approach: The difference between the current price for ICE and the mean price target is $2.97, which represents a 5.12% move (10.66% annualized). Since the 180-day implied volatility for ICE is 19.40%, 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 INTERCONTINENTALEXCHANGE closed in the range $54.30-$70.70 on 15-Sep-2017. Based on our analysis, there is a 66.30% likelihood of this return. The maximum return for this trade would be 16.28% if INTERCONTINENTALEXCHANGE closed in the range $55.00-$70.00.
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 3:18:05 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.