Quantcha now offering unlimited commission-free options trading.
Quantchabot has detected a promising Bear Put Spread trade opportunity for KRATOS DEFENSE & SECURITY (KTOS) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
KTOS was recently trading at $16.89 and has an implied volatility of 43.84% for this period. Based on an analysis of the options available for KTOS expiring on 18-Feb-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $14.68-$16.89 at expiration. In this scenario, the average linear return for the trade would be 19.48%.
Big -7.96% Change: After closing the last trading session at $18.35, KRATOS DEFENSE & SECURITY opened today at $17.54 and has reached a low of $16.85.
Trade approach: A movement as big as -7.96% is a significantly bearish indicator, so this trade is designed to be profitable if KTOS maintains its current direction and does not revert back to pricing on the bullish side of $16.89 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 KRATOS DEFENSE & SECURITY closes at or below $16.95 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 51.00% 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.