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Quantchabot has detected a promising Bull Put Spread trade opportunity for MONOLITHIC POWER SYSTEMS (MPWR) for the 19-Jun-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MPWR was recently trading at $206.91 and has an implied volatility of 42.43% for this period. Based on an analysis of the options available for MPWR expiring on 19-Jun-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $207.04-$242.75 at expiration. In this scenario, the average linear return for the trade would be 38.02%.
52 week high: MONOLITHIC POWER SYSTEMS recently reached a new 52-week high at $207.99. MPWR had traded in the range $114.84-$193.10 over the past year.
Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if MPWR maintains its current direction and does not revert back to pricing on the bearish side of $206.91 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 MONOLITHIC POWER SYSTEMS closes at or above $204.10 on 19-Jun-2020. Based on our risk-neutral analysis, there is a 53.58% 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.