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Quantchabot has detected a promising Bull Put Spread trade opportunity for CANADIAN IMP BK OF CMRC (CM) for the 19-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CM was recently trading at $88.93 and has an implied volatility of 17.55% for this period. Based on an analysis of the options available for CM expiring on 19-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $88.94-$94.14 at expiration. In this scenario, the average linear return for the trade would be 45.27%.
52 week high: CANADIAN IMP BK OF CMRC recently reached a new 52-week high at $89.04. CM had traded in the range $46.45-$88.68 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 CM maintains its current direction and does not revert back to pricing on the bearish side of $88.93 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 bullish strategy, the trade would be profitable if CANADIAN IMP BK OF CMRC closes at or above $88.35 on 19-Feb-2021. Based on our risk-neutral analysis, there is a 54.68% 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.