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Quantchabot has detected a promising Bull Put Spread trade opportunity for SOUTHERN COPPER (SCCO) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SCCO was recently trading at $57.07 and has an implied volatility of 34.42% for this period. Based on an analysis of the options available for SCCO expiring on 15-Jan-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $57.08-$65.35 at expiration. In this scenario, the average linear return for the trade would be 46.21%.
52 week high: SOUTHERN COPPER recently reached a new 52-week high at $57.45. SCCO had traded in the range $23.43-$56.98 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 SCCO maintains its current direction and does not revert back to pricing on the bearish side of $57.07 on 15-Jan-2021. 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 SOUTHERN COPPER closes at or above $56.40 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 53.55% 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.