Quantcha now offering unlimited commission-free options trading.
Quantchabot has detected a promising Covered Put trade opportunity for BAIDU (BIDU) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BIDU was recently trading at $306.20 and has an implied volatility of 80.34% for this period. Based on an analysis of the options available for BIDU expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $225.91-$306.25 at expiration. In this scenario, the average linear return for the trade would be 87.88%.
Big -8.81% Change: After closing the last trading session at $335.79, BAIDU opened today at $315.00 and has reached a low of $290.00.
Trade approach: A movement as big as -8.81% is a significantly bearish indicator, so this trade is designed to be profitable if BIDU maintains its current direction and does not revert back to pricing on the bullish side of $306.20 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 BAIDU closes at or below $454.35 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 90.26% 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.