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Quantchabot has detected a promising Bear Put Spread trade opportunity for TREX COMPANY (TREX) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TREX was recently trading at $92.44 and has an implied volatility of 45.41% for this period. Based on an analysis of the options available for TREX expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $77.85-$92.46 at expiration. In this scenario, the average linear return for the trade would be 58.47%.
Big -7.74% Change: After closing the last trading session at $100.19, TREX COMPANY opened today at $96.74 and has reached a low of $90.10.
Trade approach: A movement as big as -7.74% is a significantly bearish indicator, so this trade is designed to be profitable if TREX maintains its current direction and does not revert back to pricing on the bullish side of $92.44 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 TREX COMPANY closes at or below $92.90 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 51.11% 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.