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Quantchabot has detected a promising Bull Put Spread trade opportunity for PULTEGROUP (PHM) for the 23-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PHM was recently trading at $53.70 and has an implied volatility of 31.68% for this period. Based on an analysis of the options available for PHM expiring on 23-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $53.70-$57.42 at expiration. In this scenario, the average linear return for the trade would be 46.96%.
52 week high: PULTEGROUP recently reached a new 52-week high at $54.22. PHM had traded in the range $20.16-$53.98 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 PHM maintains its current direction and does not revert back to pricing on the bearish side of $53.70 on 23-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 PULTEGROUP closes at or above $53.35 on 23-Apr-2021. Based on our risk-neutral analysis, there is a 53.92% 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.