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Quantchabot has detected a promising Bull Put Spread trade opportunity for UNION PACIFIC (UNP) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
UNP was recently trading at $223.58 and has an implied volatility of 21.94% for this period. Based on an analysis of the options available for UNP expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $223.59-$232.40 at expiration. In this scenario, the average linear return for the trade would be 56.70%.
52 week high: UNION PACIFIC recently reached a new 52-week high at $224.62. UNP had traded in the range $134.80-$223.95 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 UNP maintains its current direction and does not revert back to pricing on the bearish side of $223.58 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 bullish strategy, the trade would be profitable if UNION PACIFIC closes at or above $223.10 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 52.25% 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.