If BMY Price Stays Between $41 to $42 Range This Iron Condor Spread Will Yield 69%

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This BMY Iron Condor Could Turn 69% Profit in 6 Days

Outlook is neutral, with stock confined to a span of ±1%

Strategy has +69% ROI potential and 8% overvalued

Buy39 Put
Sell40.5 Put
Sell41.5 Call
Buy43 Call

Bristol-Myers Squibb Company has fallen by -0.8% today to $40.78. Over the last two weeks, the stock has traded between $39.35 and $42.50. Implied volatility for BMY is down -4.8% today, indicating the market is potentially forecasting lower volatility in the weeks ahead. Based on historical stock price behavior, this spread for BMY has a theoretical 73% success rate.

Option Profit Calculator for BMY Iron Condor at 19-Jul-24 Expiration

If BMY stock price at expiration is between $40.50 and $41.50, this spread has a 69% upside potential

As you can see in the chart above, the ideal outcome is for BMY stock price to close between $40.50 and $41.50 at the July 19, 2024 expiration. Within that price range, all of the options will expire worthless, and you'd keep the original $0.61 credit you received at the time of the trade.

The maximum gain will be realized if the stock price is between $40.50 and $41.50. The maximum gain is $0.61

The maximum loss would occur if the stock price at expiration is below $39.00 or above $43.00. The maximum loss is $0.89

BMY Spread Current Market Price vs. Historical Average

BMY Iron Condor is trading at a 8% premium to historical average.

Using historical data to measure how a similar spread in BMY was priced in the market, the 4-year average value was 0.56, with a high mark of 0.85 and a low of 0.36.

Currently, this iron condor is bid at 0.61 and offered at 0.70. The midpoint of the spread is 0.66.

If we use 0.56 as our historical fair value benchmark, the current market bid price is at a 8% premium, while the current market midpoint represents a 16% premium.

Current PriceHistorical Values of Similar Iron Condors
Market Chameleon captures daily records of market data to calculate historical benchmarks and generate estimated values.

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