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Quantchabot has detected a promising Bear Call Spread trade opportunity for CLOUDFLARE INC (NET) for the 24-Jun-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NET was recently trading at $66.89 and has an implied volatility of 88.11% for this period. Based on an analysis of the options available for NET expiring on 24-Jun-2022, there is a 34.18% likelihood that the underlying will close within the analyzed range of $48.36-$66.93 at expiration. In this scenario, the average linear return for the trade would be 36.49%.
Big -14.03% Change: After closing the last trading session at $77.81, CLOUDFLARE INC opened today at $65.41 and has reached a low of $60.90.
Trade approach: A movement as big as -14.03% is a significantly bearish indicator, so this trade is designed to be profitable if NET maintains its current direction and does not revert back to pricing on the bullish side of $66.89 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 CLOUDFLARE INC closes at or below $66.95 on 24-Jun-2022. Based on our risk-neutral analysis, there is a 50.03% 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.