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Quantchabot has detected a promising Secured Put trade opportunity for CENTENNIAL RESOURCE DEVELOPMENT INC CLASS A COMMO (CDEV) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CDEV was recently trading at $5.21 and has an implied volatility of 67.42% for this period. Based on an analysis of the options available for CDEV expiring on 21-Feb-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $5.22-$6.73 at expiration. In this scenario, the average linear return for the trade would be 13.06%.
Big 11.09% Change: After closing the last trading session at $4.69, CENTENNIAL RESOURCE DEVELOPMENT INC CLASS A COMMO opened today at $5.05 and has reached a high of $5.26.
Trade approach: A movement as big as 11.09% is a significantly bullish indicator, so this trade is designed to be profitable if CDEV maintains its current direction and does not revert back to pricing on the bearish side of $5.21 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 bullish strategy, the trade would be profitable if CENTENNIAL RESOURCE DEVELOPMENT INC CLASS A COMMO closes at or above $5.20 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 50.68% 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.