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Quantchabot has detected a promising Covered Put trade opportunity for POINTS INTERNATIONAL (PCOM) for the 17-Jul-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PCOM was recently trading at $7.09 and has an implied volatility of 66.18% for this period. Based on an analysis of the options available for PCOM expiring on 17-Jul-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $5.47-$7.09 at expiration. In this scenario, the average linear return for the trade would be 23.72%.
52 week low: POINTS INTERNATIONAL recently reached a new 52-week low at $7.03. PCOM had traded in the range $7.07-$19.06 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 PCOM maintains its current direction and does not revert back to pricing on the bullish side of $7.09 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 bearish strategy, the trade would be profitable if POINTS INTERNATIONAL closes at or below $7.14 on 17-Jul-2020. Based on our risk-neutral analysis, there is a 51.04% 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.