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Quantchabot has detected a promising Bear Call Spread trade opportunity for HDFC BANK (HDB) for the 15-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HDB was recently trading at $51.12 and has an implied volatility of 39.73% for this period. Based on an analysis of the options available for HDB expiring on 15-Jul-2022, there is a 34.16% likelihood that the underlying will close within the analyzed range of $42.68-$50.65 at expiration. In this scenario, the average linear return for the trade would be 26.95%.
52 week low: HDFC BANK recently reached a new 52-week low at $50.61. HDB had traded in the range $52.90-$79.39 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 HDB maintains its current direction and does not revert back to pricing on the bullish side of $51.12 on 15-Jul-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 HDFC BANK closes at or below $50.95 on 15-Jul-2022. Based on our risk-neutral analysis, there is a 51.40% 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.