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Quantchabot has detected a promising Bear Call Spread trade opportunity for HOME DEPOT (HD) for the 13-May-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HD was recently trading at $291.48 and has an implied volatility of 43.17% for this period. Based on an analysis of the options available for HD expiring on 13-May-2022, there is a 34.40% likelihood that the underlying will close within the analyzed range of $273.76-$291.51 at expiration. In this scenario, the average linear return for the trade would be 21.47%.
52 week low: HOME DEPOT recently reached a new 52-week low at $289.41. HD had traded in the range $293.59-$420.61 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 HD maintains its current direction and does not revert back to pricing on the bullish side of $291.48 on 13-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 HOME DEPOT closes at or below $291.53 on 13-May-2022. Based on our risk-neutral analysis, there is a 50.05% 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.