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Quantchabot has detected a promising Bear Call Spread trade opportunity for ELECTRONIC ARTS (EA) for the 6-May-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
EA was recently trading at $116.93 and has an implied volatility of 25.25% for this period. Based on an analysis of the options available for EA expiring on 6-May-2022, there is a 37.90% likelihood that the underlying will close within the analyzed range of $115.71-$116.93 at expiration. In this scenario, the average linear return for the trade would be 28.54%.
52 week low: ELECTRONIC ARTS recently reached a new 52-week low at $116.37. EA had traded in the range $117.58-$148.93 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 EA maintains its current direction and does not revert back to pricing on the bullish side of $116.93 on 6-May-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 ELECTRONIC ARTS closes at or below $116.97 on 6-May-2022. Based on our risk-neutral analysis, there is a 51.49% 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.