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Quantchabot has detected a promising Bear Put Spread trade opportunity for SPDR CONSUMER STAPLES SELECT (XLP) for the 30-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
XLP was recently trading at $66.17 and has an implied volatility of 14.49% for this period. Based on an analysis of the options available for XLP expiring on 30-Oct-2020, there is a 34.06% likelihood that the underlying will close within the analyzed range of $64.35-$66.17 at expiration. In this scenario, the average linear return for the trade would be 24.74%.
Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, SPDR CONSUMER STAPLES SELECT was recently trending, indicating that breaking news and/or market activity has significantly impacted sentiment toward the stock. This movement can be interpretted as a sign of more near-term price movement for the underlying.
Trade approach: The recent sentiment change in XLP on StockTwits appears to be significantly negative, indicating that the stock is likely to follow in that direction for investors trading on sentiment. As a result, a bearish strategy could prove effective if the sentiment ultimately turns out to drive trading.
Upside potential: Using this bearish strategy, the trade would be profitable if SPDR CONSUMER STAPLES SELECT closed at or below $66.21 on 30-Oct-2020. Based on our analysis, there is a 50.78% 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.