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Quantchabot has detected a promising Bull Put Spread trade opportunity for NOVARTIS (NVS) for the 17-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NVS was recently trading at $97.87 and has an implied volatility of 7.88% for this period. Based on an analysis of the options available for NVS expiring on 17-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $98.17-$104.29 at expiration. In this scenario, the average linear return for the trade would be 116.27%.
52 week high: NOVARTIS recently reached a new 52-week high at $98.07. NVS had traded in the range $74.97-$97.00 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 NVS maintains its current direction and does not revert back to pricing on the bearish side of $97.87 on 17-Apr-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 NOVARTIS closes at or above $97.75 on 17-Apr-2020. Based on our risk-neutral analysis, there is a 52.82% 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.