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Quantchabot has detected a promising Covered Put trade opportunity for ABBOTT LABORATORIES (ABT) for the 9-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ABT was recently trading at $66.08 and has an implied volatility of 62.29% for this period. Based on an analysis of the options available for ABT expiring on 9-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $57.57-$66.10 at expiration. In this scenario, the average linear return for the trade would be 11.84%.
52 week low: ABBOTT LABORATORIES recently reached a new 52-week low at $64.50. ABT had traded in the range $67.95-$92.45 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if ABT maintains its current direction and does not revert back to pricing on the bullish side of $66.08 on 9-Apr-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 ABBOTT LABORATORIES closes at or below $66.23 on 9-Apr-2020. Based on our risk-neutral analysis, there is a 50.56% 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.