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Quantchabot has detected a promising Bull Put Spread trade opportunity for CANADIAN PACIFIC RAILWAY (CP) for the 18-Dec-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

CP was recently trading at $333.31 and has an implied volatility of 22.85% for this period. Based on an analysis of the options available for CP expiring on 18-Dec-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $333.35-$356.78 at expiration. In this scenario, the average linear return for the trade would be 28.74%.

52 week high: CANADIAN PACIFIC RAILWAY recently reached a new 52-week high at $334.99. CP had traded in the range $173.26-$332.91 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 CP maintains its current direction and does not revert back to pricing on the bearish side of $333.31 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 bullish strategy, the trade would be profitable if CANADIAN PACIFIC RAILWAY closes at or above $332.40 on 18-Dec-2020. Based on our risk-neutral analysis, there is a 51.68% 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.