Options Idea: Sell The PAM Sep. 18, 2020 10.0 Put @ $0.40

30 août 2020

Pampa Energia (PAM) is reversing a long-term downtrend, and beginning to trend upwards. After hitting a low of $8.72 in March, we’ve been seeing higher highs and lower lows for the last 4 months. This is an Argentine stock and it’ll probably see a bump higher after the government finishes its sovereign debt restructuring. Also, PAM has a share buy-back program in place and management has been very aggressive about buying back their ADRs when they get close to the $10 zone, which is the strike we've chosen for our naked put.

Warning: PAM options are not liquid. So if you decide to enter into this trade, you’ll probably have to take all the way to Sep 18. Since there isn’t much liquidity, so probably won't be for everyone, but we think the current set-up offers a good risk/reward ratio.

20-PAM-02

• Opening Date: July 27, 2020
  
• Expiration Date: September 18, 2020
  
• DTE: 53
  
• IV: 76.42%
  
• IV Percentile: 42%
  
• Odds of Winning: 77.87%%
  
• Odds of Losing: 22.13%%
  
• Win: > 9.60 @ Expiration
  
• Loss: < 9.60 @ Expiration
  
• Reg-T Margin: $290
  

Chart Legend

• Green Area: 100% Win Zone. If we finish above or in the green area, we keep 100% of our initial credit. The size of the green area is the size of credit (our maximum win).
  
• Yellow Area: Danger Zone: We still win, but we have to give back some of the initial credit taken in.
  
• Red Area: If we finish in this area we have a loss. The size of the red area is the size of our maximum loss.
  
• 1 standard deviation, 2 standard deviation, 3 standard deviation projections from Opening Date to Expiration Date are included.