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Quantchabot has detected a promising Bull Put Spread trade opportunity for QUEST DIAGNOSTICS (DGX) for the 19-Jun-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DGX was recently trading at $114.96 and has an implied volatility of 40.58% for this period. Based on an analysis of the options available for DGX expiring on 19-Jun-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $115.04-$134.36 at expiration. In this scenario, the average linear return for the trade would be 59.43%.
Big 7.82% Change: After closing the last trading session at $106.62, QUEST DIAGNOSTICS opened today at $109.43 and has reached a high of $115.00.
Trade approach: A movement as big as 7.82% is a significantly bullish indicator, so this trade is designed to be profitable if DGX maintains its current direction and does not revert back to pricing on the bearish side of $114.96 on 19-Jun-2020. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bullish strategy, the trade would be profitable if QUEST DIAGNOSTICS closes at or above $113.90 on 19-Jun-2020. Based on our risk-neutral analysis, there is a 52.56% 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.