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Quantchabot has detected a promising Bull Put Spread trade opportunity for BERKSHIRE HATHAWAY (BRK.B) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BRK.B was recently trading at $228.40 and has an implied volatility of 12.11% for this period. Based on an analysis of the options available for BRK.B expiring on 21-Feb-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $228.85-$238.67 at expiration. In this scenario, the average linear return for the trade would be 55.54%.
52 week high: BERKSHIRE HATHAWAY recently reached a new 52-week high at $228.53. BRK.B had traded in the range $194.46-$228.39 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 BRK.B maintains its current direction and does not revert back to pricing on the bearish side of $228.40 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 BERKSHIRE HATHAWAY closes at or above $228.16 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 52.86% 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.