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Quantchabot has detected a promising Bull Put Spread trade opportunity for ARCH CAPITAL GROUP (ACGL) for the 21-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ACGL was recently trading at $43.80 and has an implied volatility of 22.65% for this period. Based on an analysis of the options available for ACGL expiring on 21-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $43.81-$47.95 at expiration. In this scenario, the average linear return for the trade would be 42.93%.
52 week high: ARCH CAPITAL GROUP recently reached a new 52-week high at $43.93. ACGL had traded in the range $31.23-$43.72 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 ACGL maintains its current direction and does not revert back to pricing on the bearish side of $43.80 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 ARCH CAPITAL GROUP closes at or above $43.35 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 54.61% 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.