52-Week Low Alert: Trading today’s movement in NEXPOINT RESIDENTIAL TRUST IN $NXRT

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Quantchabot has detected a promising Covered Put trade opportunity for NEXPOINT RESIDENTIAL TRUST IN (NXRT) for the 17-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

NXRT was recently trading at $25.29 and has an implied volatility of 84.45% for this period. Based on an analysis of the options available for NXRT expiring on 17-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $20.07-$25.30 at expiration. In this scenario, the average linear return for the trade would be 21.78%.

52 week low: NEXPOINT RESIDENTIAL TRUST IN recently reached a new 52-week low at $22.21. NXRT had traded in the range $22.38-$52.87 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 NXRT maintains its current direction and does not revert back to pricing on the bullish side of $25.29 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 NEXPOINT RESIDENTIAL TRUST IN closes at or below $25.50 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.