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Big Loser Alert: Trading today’s -12.0% move in COVENANT LOGISTICS GROUP INC

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Quantchabot has detected a promising Covered Put trade opportunity for COVENANT LOGISTICS GROUP INC (CVLG) for the 18-Dec-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

CVLG was recently trading at $15.40 and has an implied volatility of 69.63% for this period. Based on an analysis of the options available for CVLG expiring on 18-Dec-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $11.83-$15.40 at expiration. In this scenario, the average linear return for the trade would be 25.65%.

Big -12.05% Change: After closing the last trading session at $17.51, COVENANT LOGISTICS GROUP INC opened today at $17.01 and has reached a low of $15.05.

Trade approach: A movement as big as -12.05% is a significantly bearish indicator, so this trade is designed to be profitable if CVLG maintains its current direction and does not revert back to pricing on the bullish side of $15.40 on 18-Dec-2020. 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 COVENANT LOGISTICS GROUP INC closes at or below $15.65 on 18-Dec-2020. Based on our risk-neutral analysis, there is a 52.39% 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.

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