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Quantchabot has detected a promising Bear Put Spread trade opportunity for CLOUDFLARE INC (NET) for the 4-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NET was recently trading at $103.25 and has an implied volatility of 73.10% for this period. Based on an analysis of the options available for NET expiring on 4-Feb-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $86.18-$103.25 at expiration. In this scenario, the average linear return for the trade would be 57.51%.
Big -9.41% Change: After closing the last trading session at $113.97, CLOUDFLARE INC opened today at $112.94 and has reached a low of $103.03.
Trade approach: A movement as big as -9.41% is a significantly bearish indicator, so this trade is designed to be profitable if NET maintains its current direction and does not revert back to pricing on the bullish side of $103.25 on 4-Feb-2022. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bearish strategy, the trade would be profitable if CLOUDFLARE INC closes at or below $103.65 on 4-Feb-2022. Based on our risk-neutral analysis, there is a 50.85% 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.