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Quantchabot has detected a promising Bull Put Spread trade opportunity for HEWLETT-PACKARD (HPQ) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HPQ was recently trading at $32.23 and has an implied volatility of 27.86% for this period. Based on an analysis of the options available for HPQ expiring on 21-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $32.23-$35.56 at expiration. In this scenario, the average linear return for the trade would be 67.15%.
52 week high: HEWLETT-PACKARD recently reached a new 52-week high at $32.57. HPQ had traded in the range $13.39-$32.14 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 HPQ maintains its current direction and does not revert back to pricing on the bearish side of $32.23 on 21-May-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 HEWLETT-PACKARD closes at or above $32.13 on 21-May-2021. Based on our risk-neutral analysis, there is a 51.32% 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.