52-Week Low Alert: Trading today’s movement in YUM CHINA HOLDINGS INC $YUMC

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Quantchabot has detected a promising Bear Put Spread trade opportunity for YUM CHINA HOLDINGS INC (YUMC) for the 21-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

YUMC was recently trading at $46.75 and has an implied volatility of 30.36% for this period. Based on an analysis of the options available for YUMC expiring on 21-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $44.78-$46.75 at expiration. In this scenario, the average linear return for the trade would be 30.02%.

52 week low: YUM CHINA HOLDINGS INC recently reached a new 52-week low at $46.68. YUMC had traded in the range $46.91-$69.67 over the past year.

Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if YUMC maintains its current direction and does not revert back to pricing on the bullish side of $46.75 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 bearish strategy, the trade would be profitable if YUM CHINA HOLDINGS INC closes at or below $46.80 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 50.98% 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.