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Quantchabot has detected a promising Covered Put trade opportunity for TAL EDUCATION GROUP (TAL) for the 16-Jul-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TAL was recently trading at $28.75 and has an implied volatility of 92.84% for this period. Based on an analysis of the options available for TAL expiring on 16-Jul-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $21.55-$28.76 at expiration. In this scenario, the average linear return for the trade would be 123.89%.
Big -7.45% Change: After closing the last trading session at $31.07, TAL EDUCATION GROUP opened today at $30.77 and has reached a low of $28.72.
Trade approach: A movement as big as -7.45% is a significantly bearish indicator, so this trade is designed to be profitable if TAL maintains its current direction and does not revert back to pricing on the bullish side of $28.75 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 TAL EDUCATION GROUP closes at or below $42.85 on 16-Jul-2021. Based on our risk-neutral analysis, there is a 91.65% 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.