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Quantchabot has detected a promising Bull Put Spread trade opportunity for SM ENERGY (SM) for the 15-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SM was recently trading at $22.77 and has an implied volatility of 77.38% for this period. Based on an analysis of the options available for SM expiring on 15-Oct-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $22.77-$28.46 at expiration. In this scenario, the average linear return for the trade would be 70.96%.
Big 12.39% Change: After closing the last trading session at $20.26, SM ENERGY opened today at $21.23 and has reached a high of $23.03.
Trade approach: A movement as big as 12.39% is a significantly bullish indicator, so this trade is designed to be profitable if SM maintains its current direction and does not revert back to pricing on the bearish side of $22.77 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 bullish strategy, the trade would be profitable if SM ENERGY closes at or above $22.60 on 15-Oct-2021. Based on our risk-neutral analysis, there is a 51.35% 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.