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Quantchabot has detected a promising Bear Put Spread trade opportunity for PROOFPOINT (PFPT) for the 18-Sep-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PFPT was recently trading at $114.34 and has an implied volatility of 40.55% for this period. Based on an analysis of the options available for PFPT expiring on 18-Sep-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $98.52-$114.36 at expiration. In this scenario, the average linear return for the trade would be 57.41%.
Big -8.73% Change: After closing the last trading session at $125.27, PROOFPOINT opened today at $120.47 and has reached a low of $112.59.
Trade approach: A movement as big as -8.73% is a significantly bearish indicator, so this trade is designed to be profitable if PFPT maintains its current direction and does not revert back to pricing on the bullish side of $114.34 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 bearish strategy, the trade would be profitable if PROOFPOINT closes at or below $115.90 on 18-Sep-2020. Based on our risk-neutral analysis, there is a 53.56% 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.