Big Gainer Alert: Trading today’s 7.5% move in XP INC. CL A $XP

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Quantchabot has detected a promising Bull Put Spread trade opportunity for XP INC. CL A (XP) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

XP was recently trading at $29.80 and has an implied volatility of 57.58% for this period. Based on an analysis of the options available for XP expiring on 18-Feb-2022, there is a 34.13% likelihood that the underlying will close within the analyzed range of $29.80-$35.91 at expiration. In this scenario, the average linear return for the trade would be 50.70%.

Big 7.50% Change: After closing the last trading session at $27.72, XP INC. CL A opened today at $27.09 and has reached a high of $29.93.

Trade approach: A movement as big as 7.50% is a significantly bullish indicator, so this trade is designed to be profitable if XP maintains its current direction and does not revert back to pricing on the bearish side of $29.80 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 bullish strategy, the trade would be profitable if XP INC. CL A closes at or above $29.65 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 51.09% 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.