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Quantchabot has detected a promising Bull Put Spread trade opportunity for STITCH FIX INC. CLASS A COMMON STOCK (SFIX) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SFIX was recently trading at $52.79 and has an implied volatility of 65.44% for this period. Based on an analysis of the options available for SFIX expiring on 21-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $52.79-$66.49 at expiration. In this scenario, the average linear return for the trade would be 79.55%.
Big 9.45% Change: After closing the last trading session at $48.23, STITCH FIX INC. CLASS A COMMON STOCK opened today at $49.65 and has reached a high of $53.65.
Trade approach: A movement as big as 9.45% is a significantly bullish indicator, so this trade is designed to be profitable if SFIX maintains its current direction and does not revert back to pricing on the bearish side of $52.79 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 STITCH FIX INC. CLASS A COMMON STOCK closes at or above $52.65 on 21-May-2021. Based on our risk-neutral analysis, there is a 50.47% 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.