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Quantchabot has detected a promising Bull Call Spread trade opportunity for DOW INC (DOW) for the 16-Jul-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DOW was recently trading at $70.05 and has an implied volatility of 30.21% for this period. Based on an analysis of the options available for DOW expiring on 16-Jul-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $69.36-$78.42 at expiration. In this scenario, the average linear return for the trade would be 59.21%.
52 week high: DOW INC recently reached a new 52-week high at $70.62. DOW had traded in the range $30.90-$70.60 over the past year.
Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if DOW maintains its current direction and does not revert back to pricing on the bearish side of $70.05 on 16-Jul-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 DOW INC closes at or above $69.05 on 16-Jul-2021. Based on our risk-neutral analysis, there is a 51.44% 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.