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Will Snap hit $24 in the next four months? Options traders say it’s a coin flip

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Investors who have lost money in Snap shouldn't look to the options market for comfort.

Over the next few months, Snap shares have only a 50 percent chance of so much as touching the $24 level at which they began trading a few weeks ago, based on an options market metric called "probability of touch."

To be sure, touch probability represents a math-driven guess, rather than the percentage arrived at by the haggling of buyers and sellers in an open market.

When it comes valuing of ordinary options, the key question is not how likely it is that an underlying stock will hit a given level, but rather, how likely it is that the stock closes above (or below) its strike price on expiration day. However, options prices can hold a lot of information, and one especially interesting calculation that can be performed using the comparison between the stock's current price and all the prices at which options are trading is the touch probability.

When it comes to Snap, the outputs of different probability of touch calculators suggest that based on current options prices, Snap has a 48 percent to 53 percent chance of touching $24 by July 21. Given that the stock closed on Monday at $19.93, this may sound like it presents an opportunity for potential buyers.

Yet one must also recall that $24 is the level at which the stock opened its first day of trading, and that the social networking-cum-camera company reached a high of $29 on its second session, March 3.

After the stock fell as low as $18.90 on Friday, Monness Crespi Hardt analyst James Cakmak saw fit to initiate coverage with a Monday morning buy rating, Snap's first following a barrage of sell and neutral reports. But the fact that Cakmak is bullish may partially be a function of how far the stock has fallen: His target is $25 — 15 percent below the record high.

"There is substantial execution risk, but we're prepared to give the benefit of the doubt at this stage," Cakmak wrote — sounding not too dissimilar from Needham analyst Laura Martin, who entitled her March 6 report: "Like a Lottery Ticket — Initiating at Underperform." Martin values the stock at $19 to $23 per share, meaning that at this point, she should technically foresee upside.

All in all, an assessment of Wall Street research and the options market would suggest that those who bought the stock at its frothy-looking early levels shouldn't really expect to make their money back.

"I like the company, but they're asking people to pay too much for what's still an experiment," Max Wolff of 55 Capital commented Friday on CNBC's "Power Lunch."

"It's nowhere near as expensive as it was on the first day," he added optimistically.

(Disclosure: CNBC parent NBCUniversal is an investor in Snap.)