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Quantchabot has detected a promising Bull Put Spread trade opportunity for CLOUDFLARE INC (NET) for the 22-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

NET was recently trading at $77.09 and has an implied volatility of 61.07% for this period. Based on an analysis of the options available for NET expiring on 22-Jan-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $77.11-$96.50 at expiration. In this scenario, the average linear return for the trade would be 83.59%.

52 week high: CLOUDFLARE INC recently reached a new 52-week high at $77.33. NET had traded in the range $15.05-$76.80 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 NET maintains its current direction and does not revert back to pricing on the bearish side of $77.09 on 22-Jan-2021. 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 CLOUDFLARE INC closes at or above $75.50 on 22-Jan-2021. Based on our risk-neutral analysis, there is a 53.74% 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.