Big Loser Alert: Trading today’s -8.2% move in SM ENERGY $SM

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Quantchabot has detected a promising Bear Call Spread trade opportunity for SM ENERGY (SM) for the 17-Jun-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

SM was recently trading at $32.63 and has an implied volatility of 75.52% for this period. Based on an analysis of the options available for SM expiring on 17-Jun-2022, there is a 34.18% likelihood that the underlying will close within the analyzed range of $24.92-$32.65 at expiration. In this scenario, the average linear return for the trade would be 22.56%.

Big -8.16% Change: After closing the last trading session at $35.53, SM ENERGY opened today at $34.73 and has reached a low of $32.54.

Trade approach: A movement as big as -8.16% is a significantly bearish indicator, so this trade is designed to be profitable if SM maintains its current direction and does not revert back to pricing on the bullish side of $32.63 on 17-Jun-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 SM ENERGY closes at or below $32.80 on 17-Jun-2022. Based on our risk-neutral analysis, there is a 50.70% 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.