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Big Gainer Alert: Trading today’s 7.7% move in ARCH CAPITAL GROUP

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Quantchabot has detected a promising Bull Put Spread trade opportunity for ARCH CAPITAL GROUP (ACGL) for the 17-Jul-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

ACGL was recently trading at $26.14 and has an implied volatility of 46.04% for this period. Based on an analysis of the options available for ACGL expiring on 17-Jul-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $26.14-$31.42 at expiration. In this scenario, the average linear return for the trade would be 26.83%.

Big 7.66% Change: After closing the last trading session at $24.27, ARCH CAPITAL GROUP opened today at $24.31 and has reached a high of $26.40.

Trade approach: A movement as big as 7.66% is a significantly bullish indicator, so this trade is designed to be profitable if ACGL maintains its current direction and does not revert back to pricing on the bearish side of $26.14 on 17-Jul-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 ARCH CAPITAL GROUP closes at or above $26.05 on 17-Jul-2020. Based on our risk-neutral analysis, there is a 50.77% 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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