Quantchabot has detected a promising Bear Call Spread trade opportunity for ULTA BEAUTY INC (ULTA) for the 1-Dec-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ULTA was recently trading at $371.45 and has an implied volatility of 33.84% for this period. Based on an analysis of the options available for ULTA expiring on 1-Dec-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $332.69-$374.01 at expiration. In this scenario, the average linear return for the trade would be 27.77%.
52 week low: ULTA BEAUTY INC recently reached a new 52-week low at $369.84. ULTA had traded in the range $373.80-$556.60 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 ULTA maintains its current direction and does not revert back to pricing on the bullish side of $371.45 on 1-Dec-2023. 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 ULTA BEAUTY INC closes at or below $374.25 on 1-Dec-2023. Based on our risk-neutral analysis, there is a 50.23% 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.