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Quantchabot has detected a promising Bear Call Spread trade opportunity for IPATH PURE BETA CRUDE OIL ETN (OIL) for the 21-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
OIL was recently trading at $24.42 and has an implied volatility of 52.88% for this period. Based on an analysis of the options available for OIL expiring on 21-Jan-2022, there is a 34.32% likelihood that the underlying will close within the analyzed range of $22.06-$24.42 at expiration. In this scenario, the average linear return for the trade would be 30.71%.
Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, IPATH PURE BETA CRUDE OIL ETN 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 OIL 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 IPATH PURE BETA CRUDE OIL ETN closed at or below $24.50 on 21-Jan-2022. Based on our analysis, there is a 51.28% 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.