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Quantchabot has detected a promising Bull Put Spread trade opportunity for CARVANA CO (CVNA) for the 26-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CVNA was recently trading at $299.30 and has an implied volatility of 73.90% for this period. Based on an analysis of the options available for CVNA expiring on 26-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $299.34-$386.16 at expiration. In this scenario, the average linear return for the trade would be 73.11%.
52 week high: CARVANA CO recently reached a new 52-week high at $299.38. CVNA had traded in the range $22.16-$292.76 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 CVNA maintains its current direction and does not revert back to pricing on the bearish side of $299.30 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 CARVANA CO closes at or above $298.05 on 26-Feb-2021. Based on our risk-neutral analysis, there is a 50.68% 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.