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Quantchabot has detected a promising Covered Put trade opportunity for MEREDITH (MDP) for the 17-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MDP was recently trading at $13.16 and has an implied volatility of 144.63% for this period. Based on an analysis of the options available for MDP expiring on 17-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $9.73-$13.17 at expiration. In this scenario, the average linear return for the trade would be 35.35%.
52 week low: MEREDITH recently reached a new 52-week low at $12.31. MDP had traded in the range $12.48-$60.95 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 MDP maintains its current direction and does not revert back to pricing on the bullish side of $13.16 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 bearish strategy, the trade would be profitable if MEREDITH closes at or below $13.66 on 17-Apr-2020. Based on our risk-neutral analysis, there is a 54.83% 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.