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Quantchabot has detected a promising Covered Put trade opportunity for ITAU UNIBANCO HOLDING (ITUB) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ITUB was recently trading at $4.74 and has an implied volatility of 49.49% for this period. Based on an analysis of the options available for ITUB expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $3.92-$4.74 at expiration. In this scenario, the average linear return for the trade would be 11.10%.
Big -7.70% Change: After closing the last trading session at $5.13, ITAU UNIBANCO HOLDING opened today at $4.80 and has reached a low of $4.67.
Trade approach: A movement as big as -7.70% is a significantly bearish indicator, so this trade is designed to be profitable if ITUB maintains its current direction and does not revert back to pricing on the bullish side of $4.74 on 16-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 bearish strategy, the trade would be profitable if ITAU UNIBANCO HOLDING closes at or below $5.21 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 69.30% 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.