The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for PRUDENTIAL FINANCIAL () for the 19-Jan-2018 expiration period. You can analyze the opportunity in depth over at the .
PRU was recently trading at $112.12 and has an implied volatility of 18.15% for this period. Based on an analysis of the options available for PRU expiring on 19-Jan-2018, there is a 55.86% likelihood that the underlying will close within the analyzed range of $98.85-$120.82 at expiration. In this scenario, the average linear return for the trade would be 36.15%.
Price target: Zacks Research has updated their six-month price target for PRU to $109.83. This price target is a consensus price created from the price targets published by 6 participating analysts whose targets ranged from $89.00 to $122.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for PRU has been updated to 2.33, which indicates a buy consensus from analysts. Sentiment has moved from 2.14 to 2.14 to 2.33 over the past three months.
Trade approach: The difference between the current price for PRU and the mean price target is $1.88, which represents a 2.04% move (4.18% annualized). Since the 180-day implied volatility for PRU is 19.66%, 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 PRUDENTIAL FINANCIAL closed in the range $98.62-1.38 on 19-Jan-2018. Based on our analysis, there is a 57.50% likelihood of this return. The maximum return for this trade would be 46.84% if PRUDENTIAL FINANCIAL closed in the range $105.00-$115.00.
Downside risk: As with any options trade, there is a substantial downside risk where you may lose most or all of your investment.
To analyze this trade in depth, please visit the .
This is an automated post generated based on a market analysis of delayed data at 8/8/2017 11:17:49 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.