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Quantchabot has detected a promising Bear Call Spread trade opportunity for BANK OF AMERICA CORP (BAC) for the 15-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BAC was recently trading at $35.97 and has an implied volatility of 37.00% for this period. Based on an analysis of the options available for BAC expiring on 15-Jul-2022, there is a 34.16% likelihood that the underlying will close within the analyzed range of $30.27-$35.79 at expiration. In this scenario, the average linear return for the trade would be 28.82%.
52 week low: BANK OF AMERICA CORP recently reached a new 52-week low at $35.41. BAC had traded in the range $35.93-$50.11 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if BAC maintains its current direction and does not revert back to pricing on the bullish side of $35.97 on 15-Jul-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 BANK OF AMERICA CORP closes at or below $35.80 on 15-Jul-2022. Based on our risk-neutral analysis, there is a 50.09% 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.