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Quantchabot has detected a promising Bear Call Spread trade opportunity for HUMANA (HUM) for the 26-Apr-2019 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HUM was recently trading at $263.83 and has an implied volatility of 24.60% for this period. Based on an analysis of the options available for HUM expiring on 26-Apr-2019, there is a 34.14% likelihood that the underlying will close within the analyzed range of $245.10-$264.38 at expiration. In this scenario, the average linear return for the trade would be 37.56%.
52 week low: HUMANA recently reached a new 52-week low at $262.50. HUM had traded in the range $262.64-$355.88 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if HUM maintains its current direction and does not revert back to pricing on the bullish side of $263.83 on 26-Apr-2019. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bearish strategy, the trade would be profitable if HUMANA closes at or below $264.40 on 26-Apr-2019. Based on our risk-neutral analysis, there is a 50.04% 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.
To analyze this trade in depth, please visit the Quantcha Options Search Engine.
This is an automated post generated based on a market analysis of delayed data at 3/27/2019 10:44:09 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.