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Quantchabot has detected a promising Covered Put trade opportunity for FRANKLIN ELECTRIC (FELE) for the 17-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
FELE was recently trading at $45.18 and has an implied volatility of 0.00% for this period. Based on an analysis of the options available for FELE expiring on 17-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $36.08-$45.20 at expiration. In this scenario, the average linear return for the trade would be 20.87%.
52 week low: FRANKLIN ELECTRIC recently reached a new 52-week low at $41.44. FELE had traded in the range $42.33-$61.49 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 FELE maintains its current direction and does not revert back to pricing on the bullish side of $45.18 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 FRANKLIN ELECTRIC closes at or below $46.11 on 17-Apr-2020. Based on our risk-neutral analysis, there is a 53.52% 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.