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Quantchabot has detected a promising Bull Put Spread trade opportunity for WESTERN MIDSTREAM PARTNERS LP (WES) for the 19-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
WES was recently trading at $16.68 and has an implied volatility of 61.19% for this period. Based on an analysis of the options available for WES expiring on 19-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $16.68-$20.34 at expiration. In this scenario, the average linear return for the trade would be 68.56%.
Big 8.31% Change: After closing the last trading session at $15.40, WESTERN MIDSTREAM PARTNERS LP opened today at $15.85 and has reached a high of $16.68.
Trade approach: A movement as big as 8.31% is a significantly bullish indicator, so this trade is designed to be profitable if WES maintains its current direction and does not revert back to pricing on the bearish side of $16.68 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 WESTERN MIDSTREAM PARTNERS LP closes at or above $16.60 on 19-Feb-2021. Based on our risk-neutral analysis, there is a 50.99% 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.