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Quantchabot has detected a promising Bear Put Spread trade opportunity for ANHEUSER-BUSCH INBEV (BUD) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BUD was recently trading at $73.15 and has an implied volatility of 19.50% for this period. Based on an analysis of the options available for BUD expiring on 21-Feb-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $71.07-$73.18 at expiration. In this scenario, the average linear return for the trade would be 74.47%.
52 week low: ANHEUSER-BUSCH INBEV recently reached a new 52-week low at $72.90. BUD had traded in the range $73.57-$102.70 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if BUD maintains its current direction and does not revert back to pricing on the bullish side of $73.15 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 bearish strategy, the trade would be profitable if ANHEUSER-BUSCH INBEV closes at or below $73.21 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 50.60% 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.