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Quantchabot has detected a promising Bear Put Spread trade opportunity for INDUSTRIAL SELECT SECTOR SPDR (XLI) for the 18-Dec-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

XLI was recently trading at $89.21 and has an implied volatility of 21.12% for this period. Based on an analysis of the options available for XLI expiring on 18-Dec-2020, there is a 34.08% likelihood that the underlying will close within the analyzed range of $85.67-$89.21 at expiration. In this scenario, the average linear return for the trade would be 27.25%.

Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, INDUSTRIAL SELECT SECTOR SPDR was recently trending, indicating that breaking news and/or market activity has significantly impacted sentiment toward the stock. This movement can be interpretted as a sign of more near-term price movement for the underlying.

Trade approach: The recent sentiment change in XLI on StockTwits appears to be significantly negative, indicating that the stock is likely to follow in that direction for investors trading on sentiment. As a result, a bearish strategy could prove effective if the sentiment ultimately turns out to drive trading.

Upside potential: Using this bearish strategy, the trade would be profitable if INDUSTRIAL SELECT SECTOR SPDR closed at or below $89.26 on 18-Dec-2020. Based on our analysis, there is a 50.50% 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.