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Quantchabot has detected a promising Bear Put Spread trade opportunity for BIOMARIN PHARMACEUTICAL (BMRN) for the 19-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BMRN was recently trading at $82.54 and has an implied volatility of 50.09% for this period. Based on an analysis of the options available for BMRN expiring on 19-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $70.04-$82.55 at expiration. In this scenario, the average linear return for the trade would be 54.07%.
Big -8.15% Change: After closing the last trading session at $89.86, BIOMARIN PHARMACEUTICAL opened today at $83.92 and has reached a low of $81.80.
Trade approach: A movement as big as -8.15% is a significantly bearish indicator, so this trade is designed to be profitable if BMRN maintains its current direction and does not revert back to pricing on the bullish side of $82.54 on 19-Feb-2021. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bearish strategy, the trade would be profitable if BIOMARIN PHARMACEUTICAL closes at or below $83.70 on 19-Feb-2021. Based on our risk-neutral analysis, there is a 53.35% 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.