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Quantchabot has detected a promising Bear Call Spread trade opportunity for CENTURYLINK (CTL) for the 17-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CTL was recently trading at $13.47 and has an implied volatility of 29.45% for this period. Based on an analysis of the options available for CTL expiring on 17-Apr-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $11.74-$13.51 at expiration. In this scenario, the average linear return for the trade would be 42.33%.
Big -11.15% Change: After closing the last trading session at $15.16, CENTURYLINK opened today at $14.49 and has reached a low of $13.46.
Trade approach: A movement as big as -11.15% is a significantly bearish indicator, so this trade is designed to be profitable if CTL maintains its current direction and does not revert back to pricing on the bullish side of $13.47 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 CENTURYLINK closes at or below $13.65 on 17-Apr-2020. Based on our risk-neutral analysis, there is a 52.94% 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.