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Quantchabot has detected a promising Bull Put Spread trade opportunity for AFFIRM HOLDINGS INC. CLASS A COMMON STOCK (AFRM) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AFRM was recently trading at $54.04 and has an implied volatility of 84.58% for this period. Based on an analysis of the options available for AFRM expiring on 21-May-2021, there is a 34.16% likelihood that the underlying will close within the analyzed range of $54.04-$56.94 at expiration. In this scenario, the average linear return for the trade would be 33.57%.
Big 7.12% Change: After closing the last trading session at $50.45, AFFIRM HOLDINGS INC. CLASS A COMMON STOCK opened today at $51.16 and has reached a high of $56.79.
Trade approach: A movement as big as 7.12% is a significantly bullish indicator, so this trade is designed to be profitable if AFRM maintains its current direction and does not revert back to pricing on the bearish side of $54.04 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 AFFIRM HOLDINGS INC. CLASS A COMMON STOCK closes at or above $53.60 on 21-May-2021. Based on our risk-neutral analysis, there is a 56.22% 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.