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Quantchabot has detected a promising Bear Call Spread trade opportunity for AGNICO EAGLE MINES LIMITED (AEM) for the 20-Mar-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AEM was recently trading at $51.37 and has an implied volatility of 31.05% for this period. Based on an analysis of the options available for AEM expiring on 20-Mar-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $46.56-$51.25 at expiration. In this scenario, the average linear return for the trade would be 49.75%.
Big -13.10% Change: After closing the last trading session at $59.11, AGNICO EAGLE MINES LIMITED opened today at $52.20 and has reached a low of $50.74.
Trade approach: A movement as big as -13.10% is a significantly bearish indicator, so this trade is designed to be profitable if AEM maintains its current direction and does not revert back to pricing on the bullish side of $51.37 on 20-Mar-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 AGNICO EAGLE MINES LIMITED closes at or below $51.79 on 20-Mar-2020. Based on our risk-neutral analysis, there is a 54.34% 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.