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Quantchabot has detected a promising Bull Put Spread trade opportunity for MORGAN STANLEY (MS) for the 1-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MS was recently trading at $77.75 and has an implied volatility of 32.06% for this period. Based on an analysis of the options available for MS expiring on 1-Apr-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $77.76-$86.27 at expiration. In this scenario, the average linear return for the trade would be 70.54%.
52 week high: MORGAN STANLEY recently reached a new 52-week high at $77.90. MS had traded in the range $27.20-$77.76 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 MS maintains its current direction and does not revert back to pricing on the bearish side of $77.75 on 1-Apr-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 MORGAN STANLEY closes at or above $77.69 on 1-Apr-2021. Based on our risk-neutral analysis, there is a 50.35% 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.