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Quantchabot has detected a promising Covered Put trade opportunity for MACY’S (M) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
M was recently trading at $31.16 and has an implied volatility of 59.04% for this period. Based on an analysis of the options available for M expiring on 18-Feb-2022, there is a 34.13% likelihood that the underlying will close within the analyzed range of $23.28-$31.02 at expiration. In this scenario, the average linear return for the trade would be 354.66%.
Big -7.35% Change: After closing the last trading session at $33.63, MACY’S opened today at $32.59 and has reached a low of $31.08.
Trade approach: A movement as big as -7.35% is a significantly bearish indicator, so this trade is designed to be profitable if M maintains its current direction and does not revert back to pricing on the bullish side of $31.16 on 18-Feb-2022. 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 MACY’S closes at or below $46.46 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 92.04% 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.