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Quantchabot has detected a promising Bull Put Spread trade opportunity for HOME DEPOT (HD) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HD was recently trading at $238.02 and has an implied volatility of 20.02% for this period. Based on an analysis of the options available for HD expiring on 21-Feb-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $238.18-$246.77 at expiration. In this scenario, the average linear return for the trade would be 53.64%.
52 week high: HOME DEPOT recently reached a new 52-week high at $239.53. HD had traded in the range $179.52-$239.31 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 HD maintains its current direction and does not revert back to pricing on the bearish side of $238.02 on 21-Feb-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 HOME DEPOT closes at or above $238.10 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 50.37% 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.