Big Gainer Alert: Trading today’s 7.3% move in ENERPLUS $ERF

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Quantchabot has detected a promising Bull Put Spread trade opportunity for ENERPLUS (ERF) for the 18-Oct-2019 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

ERF was recently trading at $6.49 and has an implied volatility of 53.93% for this period. Based on an analysis of the options available for ERF expiring on 18-Oct-2019, there is a 34.13% likelihood that the underlying will close within the analyzed range of $6.50-$7.92 at expiration. In this scenario, the average linear return for the trade would be 34.78%.

Big 7.32% Change: After closing the last trading session at $6.05, ENERPLUS opened today at $6.14 and has reached a high of $6.52.

Trade approach: A movement as big as 7.32% is a significantly bullish indicator, so this trade is designed to be profitable if ERF maintains its current direction and does not revert back to pricing on the bearish side of $6.49 on 18-Oct-2019. 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 ENERPLUS closes at or above $6.40 on 18-Oct-2019. Based on our risk-neutral analysis, there is a 53.06% 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 8/28/2019 2:02:37 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.