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Quantchabot has detected a promising Bull Put Spread trade opportunity for OCCIDENTAL PETROLEUM (OXY) for the 29-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
OXY was recently trading at $24.24 and has an implied volatility of 77.43% for this period. Based on an analysis of the options available for OXY expiring on 29-Jan-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $24.24-$28.41 at expiration. In this scenario, the average linear return for the trade would be 108.36%.
Big 8.55% Change: After closing the last trading session at $22.33, OCCIDENTAL PETROLEUM opened today at $22.84 and has reached a high of $24.24.
Trade approach: A movement as big as 8.55% is a significantly bullish indicator, so this trade is designed to be profitable if OXY maintains its current direction and does not revert back to pricing on the bearish side of $24.24 on 29-Jan-2021. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bullish strategy, the trade would be profitable if OCCIDENTAL PETROLEUM closes at or above $24.22 on 29-Jan-2021. Based on our risk-neutral analysis, there is a 50.22% 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.