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Quantchabot has detected a promising Bear Put Spread trade opportunity for INCYTE (INCY) for the 17-Jan-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
INCY was recently trading at $77.32 and has an implied volatility of 37.34% for this period. Based on an analysis of the options available for INCY expiring on 17-Jan-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $71.53-$77.37 at expiration. In this scenario, the average linear return for the trade would be 42.86%.
Big -10.06% Change: After closing the last trading session at $85.97, INCYTE opened today at $76.15 and has reached a low of $75.16.
Trade approach: A movement as big as -10.06% is a significantly bearish indicator, so this trade is designed to be profitable if INCY maintains its current direction and does not revert back to pricing on the bullish side of $77.32 on 17-Jan-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 INCYTE closes at or below $78.25 on 17-Jan-2020. Based on our risk-neutral analysis, there is a 55.70% 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.