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Quantchabot has detected a promising Bear Put Spread trade opportunity for ADVANCED DRAINAGE SYSTEMS INC (WMS) for the 15-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
WMS was recently trading at $104.80 and has an implied volatility of 34.65% for this period. Based on an analysis of the options available for WMS expiring on 15-Oct-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $94.83-$104.80 at expiration. In this scenario, the average linear return for the trade would be 34.98%.
Big -7.12% Change: After closing the last trading session at $112.83, ADVANCED DRAINAGE SYSTEMS INC opened today at $108.05 and has reached a low of $102.64.
Trade approach: A movement as big as -7.12% is a significantly bearish indicator, so this trade is designed to be profitable if WMS maintains its current direction and does not revert back to pricing on the bullish side of $104.80 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 ADVANCED DRAINAGE SYSTEMS INC closes at or below $104.85 on 15-Oct-2021. Based on our risk-neutral analysis, there is a 50.17% 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.