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Quantchabot has detected a promising Bull Put Spread trade opportunity for CHEVRON (CVX) for the 21-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CVX was recently trading at $115.55 and has an implied volatility of 23.20% for this period. Based on an analysis of the options available for CVX expiring on 21-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $114.23-$126.84 at expiration. In this scenario, the average linear return for the trade would be 62.84%.
52 week high: CHEVRON recently reached a new 52-week high at $115.99. CVX had traded in the range $70.83-$115.29 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 CVX maintains its current direction and does not revert back to pricing on the bearish side of $115.55 on 21-Jan-2022. 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 CHEVRON closes at or above $113.05 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 53.95% 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.