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Quantchabot has detected a promising Bull Put Spread trade opportunity for INTERNATIONAL BUSINESS MACHINE (IBM) for the 27-Mar-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
IBM was recently trading at $157.36 and has an implied volatility of 19.45% for this period. Based on an analysis of the options available for IBM expiring on 27-Mar-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $156.10-$167.91 at expiration. In this scenario, the average linear return for the trade would be 25.79%.
52 week high: INTERNATIONAL BUSINESS MACHINE recently reached a new 52-week high at $158.75. IBM had traded in the range $126.85-$152.95 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 IBM maintains its current direction and does not revert back to pricing on the bearish side of $157.36 on 27-Mar-2020. 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 INTERNATIONAL BUSINESS MACHINE closes at or above $156.10 on 27-Mar-2020. Based on our risk-neutral analysis, there is a 50.00% 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.