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Quantchabot has detected a promising Bull Put Spread trade opportunity for LIVE OAK BANCSHARES INC. COMMON STOCK (LOB) for the 18-Dec-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LOB was recently trading at $46.50 and has an implied volatility of 52.90% for this period. Based on an analysis of the options available for LOB expiring on 18-Dec-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $46.51-$54.44 at expiration. In this scenario, the average linear return for the trade would be 57.44%.
Big 7.19% Change: After closing the last trading session at $43.38, LIVE OAK BANCSHARES INC. COMMON STOCK opened today at $45.00 and has reached a high of $46.50.
Trade approach: A movement as big as 7.19% is a significantly bullish indicator, so this trade is designed to be profitable if LOB maintains its current direction and does not revert back to pricing on the bearish side of $46.50 on 18-Dec-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 LIVE OAK BANCSHARES INC. COMMON STOCK closes at or above $45.75 on 18-Dec-2020. Based on our risk-neutral analysis, there is a 54.14% 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.