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Quantchabot has detected a promising Bull Put Spread trade opportunity for SHERWIN-WILLIAMS (SHW) for the 16-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SHW was recently trading at $719.76 and has an implied volatility of 26.69% for this period. Based on an analysis of the options available for SHW expiring on 16-Oct-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $719.85-$778.43 at expiration. In this scenario, the average linear return for the trade would be 58.73%.
52 week high: SHERWIN-WILLIAMS recently reached a new 52-week high at $725.91. SHW had traded in the range $325.43-$712.97 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 SHW maintains its current direction and does not revert back to pricing on the bearish side of $719.76 on 16-Oct-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 SHERWIN-WILLIAMS closes at or above $718.20 on 16-Oct-2020. Based on our risk-neutral analysis, there is a 51.17% 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.