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Quantchabot has detected a promising Bull Put Spread trade opportunity for CERENCE INC (CRNC) for the 20-Nov-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CRNC was recently trading at $57.30 and has an implied volatility of 64.78% for this period. Based on an analysis of the options available for CRNC expiring on 20-Nov-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $57.31-$70.10 at expiration. In this scenario, the average linear return for the trade would be 59.09%.
Big 7.55% Change: After closing the last trading session at $53.28, CERENCE INC opened today at $54.70 and has reached a high of $57.38.
Trade approach: A movement as big as 7.55% is a significantly bullish indicator, so this trade is designed to be profitable if CRNC maintains its current direction and does not revert back to pricing on the bearish side of $57.30 on 20-Nov-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 CERENCE INC closes at or above $56.05 on 20-Nov-2020. Based on our risk-neutral analysis, there is a 54.40% 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.