52-Week Low Alert: Trading today’s movement in T-MOBILE US INC. COMMON STOCK
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TMUS was recently trading at $115.58 and has an implied volatility of 23.94% for this period. Based on an analysis of the options available for TMUS expiring on 21-Jan-2022, there is a 34.13% likelihood that the underlying will close within the analyzed range of $104.63-$115.60 at expiration. In this scenario, the average linear return for the trade would be 68.98%.
52 week low: T-MOBILE US INC. COMMON STOCK recently reached a new 52-week low at $114.36. TMUS had traded in the range $114.69-$150.20 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 TMUS maintains its current direction and does not revert back to pricing on the bullish side of $115.58 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 T-MOBILE US INC. COMMON STOCK closes at or below $117.05 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 54.98% 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.
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