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Quantchabot has detected a promising Bull Put Spread trade opportunity for O’REILLY AUTOMOTIVE (ORLY) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ORLY was recently trading at $487.00 and has an implied volatility of 20.50% for this period. Based on an analysis of the options available for ORLY expiring on 15-Jan-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $487.01-$494.92 at expiration. In this scenario, the average linear return for the trade would be 38.18%.
52 week high: O’REILLY AUTOMOTIVE recently reached a new 52-week high at $494.47. ORLY had traded in the range $251.51-$487.95 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 ORLY maintains its current direction and does not revert back to pricing on the bearish side of $487.00 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 O’REILLY AUTOMOTIVE closes at or above $486.75 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 51.32% 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.