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Quantchabot has detected a promising Bull Put Spread trade opportunity for HEWLETT-PACKARD (HPQ) for the 26-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HPQ was recently trading at $25.80 and has an implied volatility of 35.96% for this period. Based on an analysis of the options available for HPQ expiring on 26-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $25.80-$29.24 at expiration. In this scenario, the average linear return for the trade would be 45.10%.
52 week high: HEWLETT-PACKARD recently reached a new 52-week high at $26.04. HPQ had traded in the range $12.54-$25.94 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 HPQ maintains its current direction and does not revert back to pricing on the bearish side of $25.80 on 26-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 HEWLETT-PACKARD closes at or above $25.66 on 26-Feb-2021. Based on our risk-neutral analysis, there is a 51.72% 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.