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Quantchabot has detected a promising Bull Put Spread trade opportunity for PACKAGING CORP OF AMERICA (PKG) for the 17-Jul-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PKG was recently trading at $97.24 and has an implied volatility of 36.64% for this period. Based on an analysis of the options available for PKG expiring on 17-Jul-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $97.33-$115.58 at expiration. In this scenario, the average linear return for the trade would be 57.07%.
Big 7.85% Change: After closing the last trading session at $90.16, PACKAGING CORP OF AMERICA opened today at $93.96 and has reached a high of $97.94.
Trade approach: A movement as big as 7.85% is a significantly bullish indicator, so this trade is designed to be profitable if PKG maintains its current direction and does not revert back to pricing on the bearish side of $97.24 on 17-Jul-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 PACKAGING CORP OF AMERICA closes at or above $96.20 on 17-Jul-2020. Based on our risk-neutral analysis, there is a 52.72% 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.