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Quantchabot has detected a promising Bear Put Spread trade opportunity for BRISTOL-MYERS SQUIBB (BMY) for the 22-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BMY was recently trading at $56.79 and has an implied volatility of 22.82% for this period. Based on an analysis of the options available for BMY expiring on 22-Oct-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $54.75-$56.79 at expiration. In this scenario, the average linear return for the trade would be 70.29%.
52 week low: BRISTOL-MYERS SQUIBB recently reached a new 52-week low at $56.66. BMY had traded in the range $56.75-$69.75 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 BMY maintains its current direction and does not revert back to pricing on the bullish side of $56.79 on 22-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 BRISTOL-MYERS SQUIBB closes at or below $56.93 on 22-Oct-2021. Based on our risk-neutral analysis, there is a 52.66% 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.