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Quantchabot has detected a promising Bull Put Spread trade opportunity for EMERGENT BIOSOLUTIONS (EBS) for the 18-Sep-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
EBS was recently trading at $108.50 and has an implied volatility of 54.85% for this period. Based on an analysis of the options available for EBS expiring on 18-Sep-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $108.52-$132.78 at expiration. In this scenario, the average linear return for the trade would be 43.95%.
Big 11.83% Change: After closing the last trading session at $97.02, EMERGENT BIOSOLUTIONS opened today at $103.63 and has reached a high of $114.13.
Trade approach: A movement as big as 11.83% is a significantly bullish indicator, so this trade is designed to be profitable if EBS maintains its current direction and does not revert back to pricing on the bearish side of $108.50 on 18-Sep-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 EMERGENT BIOSOLUTIONS closes at or above $108.50 on 18-Sep-2020. Based on our risk-neutral analysis, there is a 50.04% 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.