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Quantchabot has detected a promising Covered Put trade opportunity for LUFAX HOLDING LTD (LU) for the 19-Nov-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LU was recently trading at $6.83 and has an implied volatility of 68.78% for this period. Based on an analysis of the options available for LU expiring on 19-Nov-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $5.49-$6.83 at expiration. In this scenario, the average linear return for the trade would be 10.94%.
Big -7.77% Change: After closing the last trading session at $7.40, LUFAX HOLDING LTD opened today at $7.35 and has reached a low of $6.80.
Trade approach: A movement as big as -7.77% is a significantly bearish indicator, so this trade is designed to be profitable if LU maintains its current direction and does not revert back to pricing on the bullish side of $6.83 on 19-Nov-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 LUFAX HOLDING LTD closes at or below $7.77 on 19-Nov-2021. Based on our risk-neutral analysis, there is a 72.47% 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.