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Quantchabot has detected a promising Bull Put Spread trade opportunity for LORDSTOWN MOTORS CORP (RIDE) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
RIDE was recently trading at $9.06 and has an implied volatility of 118.31% for this period. Based on an analysis of the options available for RIDE expiring on 21-May-2021, there is a 34.15% likelihood that the underlying will close within the analyzed range of $9.06-$10.16 at expiration. In this scenario, the average linear return for the trade would be 68.33%.
Big 7.86% Change: After closing the last trading session at $8.40, LORDSTOWN MOTORS CORP opened today at $8.49 and has reached a high of $9.10.
Trade approach: A movement as big as 7.86% is a significantly bullish indicator, so this trade is designed to be profitable if RIDE maintains its current direction and does not revert back to pricing on the bearish side of $9.06 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 LORDSTOWN MOTORS CORP closes at or above $9.03 on 21-May-2021. Based on our risk-neutral analysis, there is a 51.16% 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.