Quantcha now offering unlimited commission-free options trading.
Quantchabot has detected a promising Bear Call Spread trade opportunity for SPDR CONSUMER DISCRET SELECT (XLY) for the 22-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
XLY was recently trading at $168.79 and has an implied volatility of 20.65% for this period. Based on an analysis of the options available for XLY expiring on 22-Jan-2021, there is a 34.09% likelihood that the underlying will close within the analyzed range of $162.60-$168.79 at expiration. In this scenario, the average linear return for the trade would be 46.17%.
Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, SPDR CONSUMER DISCRET SELECT was recently trending, indicating that breaking news and/or market activity has significantly impacted sentiment toward the stock. This movement can be interpretted as a sign of more near-term price movement for the underlying.
Trade approach: The recent sentiment change in XLY on StockTwits appears to be significantly negative, indicating that the stock is likely to follow in that direction for investors trading on sentiment. As a result, a bearish strategy could prove effective if the sentiment ultimately turns out to drive trading.
Upside potential: Using this bearish strategy, the trade would be profitable if SPDR CONSUMER DISCRET SELECT closed at or below $169.18 on 22-Jan-2021. Based on our analysis, there is a 52.41% 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.