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Quantchabot has detected a promising Bull Put Spread trade opportunity for DERMIRA INC. COMMON STOCK (DERM) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DERM was recently trading at $16.97 and has an implied volatility of 109.96% for this period. Based on an analysis of the options available for DERM expiring on 21-Feb-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $17.01-$24.52 at expiration. In this scenario, the average linear return for the trade would be 45.12%.
Big 9.84% Change: After closing the last trading session at $15.45, DERMIRA INC. COMMON STOCK opened today at $15.41 and has reached a high of $17.10.
Trade approach: A movement as big as 9.84% is a significantly bullish indicator, so this trade is designed to be profitable if DERM maintains its current direction and does not revert back to pricing on the bearish side of $16.97 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 DERMIRA INC. COMMON STOCK closes at or above $17.00 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 50.03% 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.