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Quantchabot has detected a promising Covered Put trade opportunity for MICROSTRATEGY (MSTR) for the 16-Jul-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MSTR was recently trading at $441.19 and has an implied volatility of 103.94% for this period. Based on an analysis of the options available for MSTR expiring on 16-Jul-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $291.19-$441.26 at expiration. In this scenario, the average linear return for the trade would be 282.44%.
Big -9.44% Change: After closing the last trading session at $487.20, MICROSTRATEGY opened today at $422.85 and has reached a low of $411.58.
Trade approach: A movement as big as -9.44% is a significantly bearish indicator, so this trade is designed to be profitable if MSTR maintains its current direction and does not revert back to pricing on the bullish side of $441.19 on 16-Jul-2021. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bearish strategy, the trade would be profitable if MICROSTRATEGY closes at or below $656.09 on 16-Jul-2021. Based on our risk-neutral analysis, there is a 83.00% 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.