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Quantchabot has detected a promising Covered Put trade opportunity for ROLLINS (ROL) for the 17-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ROL was recently trading at $30.89 and has an implied volatility of 88.42% for this period. Based on an analysis of the options available for ROL expiring on 17-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $26.29-$30.91 at expiration. In this scenario, the average linear return for the trade would be 15.44%.
52 week low: ROLLINS recently reached a new 52-week low at $30.72. ROL had traded in the range $31.15-$43.91 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 ROL maintains its current direction and does not revert back to pricing on the bullish side of $30.89 on 17-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 ROLLINS closes at or below $31.08 on 17-Apr-2020. Based on our risk-neutral analysis, there is a 51.36% 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.