52-Week High Alert: Trading today’s movement in PEPSICO $PEP

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Quantchabot has detected a promising Bull Put Spread trade opportunity for PEPSICO (PEP) for the 3-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

PEP was recently trading at $146.22 and has an implied volatility of 15.79% for this period. Based on an analysis of the options available for PEP expiring on 3-Apr-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $145.59-$153.58 at expiration. In this scenario, the average linear return for the trade would be 37.72%.

52 week high: PEPSICO recently reached a new 52-week high at $147.15. PEP had traded in the range $111.88-$146.74 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 PEP maintains its current direction and does not revert back to pricing on the bearish side of $146.22 on 3-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 PEPSICO closes at or above $144.62 on 3-Apr-2020. Based on our risk-neutral analysis, there is a 55.00% 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.