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Quantchabot has detected a promising Bear Call Spread trade opportunity for TENNECO (TEN) for the 17-Jan-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TEN was recently trading at $12.82 and has an implied volatility of 71.38% for this period. Based on an analysis of the options available for TEN expiring on 17-Jan-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $11.44-$12.83 at expiration. In this scenario, the average linear return for the trade would be 26.86%.
Big -7.50% Change: After closing the last trading session at $13.86, TENNECO opened today at $13.37 and has reached a low of $12.61.
Trade approach: A movement as big as -7.50% is a significantly bearish indicator, so this trade is designed to be profitable if TEN maintains its current direction and does not revert back to pricing on the bullish side of $12.82 on 17-Jan-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 TENNECO closes at or below $12.85 on 17-Jan-2020. Based on our risk-neutral analysis, there is a 50.66% 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.