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Quantchabot has detected a promising Bull Put Spread trade opportunity for NATIONAL OILWELL VARCO (NOV) for the 27-Mar-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NOV was recently trading at $24.44 and has an implied volatility of 31.94% for this period. Based on an analysis of the options available for NOV expiring on 27-Mar-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $24.50-$27.90 at expiration. In this scenario, the average linear return for the trade would be 63.04%.
Big 11.65% Change: After closing the last trading session at $21.89, NATIONAL OILWELL VARCO opened today at $23.71 and has reached a high of $24.58.
Trade approach: A movement as big as 11.65% is a significantly bullish indicator, so this trade is designed to be profitable if NOV maintains its current direction and does not revert back to pricing on the bearish side of $24.44 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 NATIONAL OILWELL VARCO closes at or above $24.39 on 27-Mar-2020. Based on our risk-neutral analysis, there is a 51.33% 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.