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Quantchabot has detected a promising Bull Put Spread trade opportunity for COLGATE-PALMOLIVE (CL) for the 23-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CL was recently trading at $80.39 and has an implied volatility of 29.68% for this period. Based on an analysis of the options available for CL expiring on 23-Oct-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $79.95-$84.25 at expiration. In this scenario, the average linear return for the trade would be 35.79%.
52 week high: COLGATE-PALMOLIVE recently reached a new 52-week high at $80.39. CL had traded in the range $58.49-$80.09 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 CL maintains its current direction and does not revert back to pricing on the bearish side of $80.39 on 23-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 COLGATE-PALMOLIVE closes at or above $79.83 on 23-Oct-2020. Based on our risk-neutral analysis, there is a 51.18% 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.