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Quantchabot has detected a promising Bear Call Spread trade opportunity for SERVICENOW (NOW) for the 24-Jun-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NOW was recently trading at $442.32 and has an implied volatility of 55.19% for this period. Based on an analysis of the options available for NOW expiring on 24-Jun-2022, there is a 34.18% likelihood that the underlying will close within the analyzed range of $361.03-$442.62 at expiration. In this scenario, the average linear return for the trade would be 40.59%.
52 week low: SERVICENOW recently reached a new 52-week low at $438.12. NOW had traded in the range $448.27-$707.60 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 NOW maintains its current direction and does not revert back to pricing on the bullish side of $442.32 on 24-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 SERVICENOW closes at or below $443.00 on 24-Jun-2022. Based on our risk-neutral analysis, there is a 50.17% 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.