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52-Week High Alert: Trading today’s movement in COSTCO WHOLESALE

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Quantchabot has detected a promising Bull Put Spread trade opportunity for COSTCO WHOLESALE (COST) for the 27-Nov-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

COST was recently trading at $379.51 and has an implied volatility of 23.36% for this period. Based on an analysis of the options available for COST expiring on 27-Nov-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $379.58-$412.16 at expiration. In this scenario, the average linear return for the trade would be 67.71%.

52 week high: COSTCO WHOLESALE recently reached a new 52-week high at $379.89. COST had traded in the range $271.28-$369.75 over the past year.

Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if COST maintains its current direction and does not revert back to pricing on the bearish side of $379.51 on 27-Nov-2020. If possible, the trade has been padded such that slight movement against the trade would still return a profit.

Upside potential: Using this bullish strategy, the trade would be profitable if COSTCO WHOLESALE closes at or above $378.60 on 27-Nov-2020. Based on our risk-neutral analysis, there is a 51.25% 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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