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Quantchabot has detected a promising Bear Put Spread trade opportunity for INCYTE (INCY) for the 15-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
INCY was recently trading at $71.46 and has an implied volatility of 39.82% for this period. Based on an analysis of the options available for INCY expiring on 15-Oct-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $63.48-$71.47 at expiration. In this scenario, the average linear return for the trade would be 48.39%.
52 week low: INCYTE recently reached a new 52-week low at $71.15. INCY had traded in the range $71.91-$101.47 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if INCY maintains its current direction and does not revert back to pricing on the bullish side of $71.46 on 15-Oct-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 INCYTE closes at or below $71.50 on 15-Oct-2021. Based on our risk-neutral analysis, there is a 50.16% 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.