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Quantchabot has detected a promising Bear Put Spread trade opportunity for GRUBHUB INC (GRUB) for the 31-Jan-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
GRUB was recently trading at $51.26 and has an implied volatility of 52.08% for this period. Based on an analysis of the options available for GRUB expiring on 31-Jan-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $45.57-$51.31 at expiration. In this scenario, the average linear return for the trade would be 50.13%.
Big -8.02% Change: After closing the last trading session at $55.73, GRUBHUB INC opened today at $51.34 and has reached a low of $51.07.
Trade approach: A movement as big as -8.02% is a significantly bearish indicator, so this trade is designed to be profitable if GRUB maintains its current direction and does not revert back to pricing on the bullish side of $51.26 on 31-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 GRUBHUB INC closes at or below $51.45 on 31-Jan-2020. Based on our risk-neutral analysis, there is a 50.91% 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.