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52-Week Low Alert: Trading today’s movement in COMPASS MINERALS

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Quantchabot has detected a promising Bear Call Spread trade opportunity for COMPASS MINERALS (CMP) for the 17-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

CMP was recently trading at $37.41 and has an implied volatility of 59.14% for this period. Based on an analysis of the options available for CMP expiring on 17-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $32.67-$37.43 at expiration. In this scenario, the average linear return for the trade would be 20.48%.

52 week low: COMPASS MINERALS recently reached a new 52-week low at $36.19. CMP had traded in the range $36.24-$66.14 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 CMP maintains its current direction and does not revert back to pricing on the bullish side of $37.41 on 17-Apr-2020. 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 COMPASS MINERALS closes at or below $38.35 on 17-Apr-2020. Based on our risk-neutral analysis, there is a 57.11% 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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