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Quantchabot has detected a promising Bull Put Spread trade opportunity for ILLINOIS TOOL WORKS (ITW) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ITW was recently trading at $233.08 and has an implied volatility of 17.77% for this period. Based on an analysis of the options available for ITW expiring on 18-Jun-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $233.11-$248.34 at expiration. In this scenario, the average linear return for the trade would be 42.34%.
52 week high: ILLINOIS TOOL WORKS recently reached a new 52-week high at $233.31. ITW had traded in the range $148.66-$232.29 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 ITW maintains its current direction and does not revert back to pricing on the bearish side of $233.08 on 18-Jun-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 ILLINOIS TOOL WORKS closes at or above $232.75 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 50.98% 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.