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Quantchabot has detected a promising Bear Put Spread trade opportunity for MCCORMICK (MKC) for the 17-Dec-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MKC was recently trading at $78.21 and has an implied volatility of 18.63% for this period. Based on an analysis of the options available for MKC expiring on 17-Dec-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $72.29-$78.22 at expiration. In this scenario, the average linear return for the trade would be 46.60%.
52 week low: MCCORMICK recently reached a new 52-week low at $78.17. MKC had traded in the range $78.40-$101.67 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 MKC maintains its current direction and does not revert back to pricing on the bullish side of $78.21 on 17-Dec-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 MCCORMICK closes at or below $78.85 on 17-Dec-2021. Based on our risk-neutral analysis, there is a 54.04% 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.