52-Week High Alert: Trading today’s movement in ILLINOIS TOOL WORKS $ITW

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

ITW was recently trading at $243.49 and has an implied volatility of 19.36% for this period. Based on an analysis of the options available for ITW expiring on 21-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $242.31-$262.14 at expiration. In this scenario, the average linear return for the trade would be 34.87%.

52 week high: ILLINOIS TOOL WORKS recently reached a new 52-week high at $244.13. ITW had traded in the range $192.89-$243.74 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 ITW maintains its current direction and does not revert back to pricing on the bearish side of $243.49 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 ILLINOIS TOOL WORKS closes at or above $240.90 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 52.95% 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.