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Quantchabot has detected a promising Covered Put trade opportunity for GAMESTOP (GME) for the 19-Nov-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
GME was recently trading at $179.50 and has an implied volatility of 97.93% for this period. Based on an analysis of the options available for GME expiring on 19-Nov-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $116.42-$179.53 at expiration. In this scenario, the average linear return for the trade would be 213.01%.
Big -9.71% Change: After closing the last trading session at $198.80, GAMESTOP opened today at $180.09 and has reached a low of $178.00.
Trade approach: A movement as big as -9.71% is a significantly bearish indicator, so this trade is designed to be profitable if GME maintains its current direction and does not revert back to pricing on the bullish side of $179.50 on 19-Nov-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 GAMESTOP closes at or below $263.10 on 19-Nov-2021. Based on our risk-neutral analysis, there is a 81.12% 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.