The automated Quantcha Trade Ideas Service has detected a promising
UTX was recently trading at $113.00 and has an implied volatility of 13.74% for this period. Based on an analysis of the options available for UTX expiring on 21-Apr-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $113.34-$119.70 at expiration. In this scenario, the average linear return for the trade would be 56.83%.
52 week high: UNITED TECHNOLOGIES recently reached a new 52-week high at $113.19. UTX had traded in the range $92.07-$112.88 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 UTX maintains its current direction and does not revert back to pricing on the bearish side of $113.00 on 21-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 UNITED TECHNOLOGIES closes at or above $113.05 on 21-Apr-2017. Based on our risk-neutral analysis, there is a 51.87% 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 11:29:05 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.