52-Week High Alert: Trading today’s movement in AUTOMATIC DATA PROCESSING $ADP

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Quantchabot has detected a promising Bull Put Spread trade opportunity for AUTOMATIC DATA PROCESSING (ADP) for the 21-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

ADP was recently trading at $240.10 and has an implied volatility of 19.98% for this period. Based on an analysis of the options available for ADP expiring on 21-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $239.10-$259.33 at expiration. In this scenario, the average linear return for the trade would be 51.06%.

52 week high: AUTOMATIC DATA PROCESSING recently reached a new 52-week high at $240.71. ADP had traded in the range $159.31-$238.25 over the past year.

Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if ADP maintains its current direction and does not revert back to pricing on the bearish side of $240.10 on 21-Jan-2022. 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 AUTOMATIC DATA PROCESSING closes at or above $236.60 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 55.14% 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.