Big Gainer Alert: Trading today’s 9.5% move in ALCOA $AA

Quantcha now offering unlimited commission-free options trading.

Quantchabot has detected a promising Bull Put Spread trade opportunity for ALCOA (AA) for the 31-Dec-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

AA was recently trading at $50.55 and has an implied volatility of 55.80% for this period. Based on an analysis of the options available for AA expiring on 31-Dec-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $50.56-$62.20 at expiration. In this scenario, the average linear return for the trade would be 48.81%.

Big 9.49% Change: After closing the last trading session at $46.17, ALCOA opened today at $48.52 and has reached a high of $50.97.

Trade approach: A movement as big as 9.49% is a significantly bullish indicator, so this trade is designed to be profitable if AA maintains its current direction and does not revert back to pricing on the bearish side of $50.55 on 31-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 bullish strategy, the trade would be profitable if ALCOA closes at or above $48.36 on 31-Dec-2021. Based on our risk-neutral analysis, there is a 58.48% 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.