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Quantchabot has detected a promising Bull Put Spread trade opportunity for NEWMONT GOLDCORP CORP (NEM) for the 7-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NEM was recently trading at $43.72 and has an implied volatility of 21.87% for this period. Based on an analysis of the options available for NEM expiring on 7-Feb-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $43.80-$46.99 at expiration. In this scenario, the average linear return for the trade would be 70.97%.
52 week high: NEWMONT GOLDCORP CORP recently reached a new 52-week high at $44.08. NEM had traded in the range $29.77-$43.04 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 NEM maintains its current direction and does not revert back to pricing on the bearish side of $43.72 on 7-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 bullish strategy, the trade would be profitable if NEWMONT GOLDCORP CORP closes at or above $43.58 on 7-Feb-2020. Based on our risk-neutral analysis, there is a 52.90% 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.