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Quantchabot has detected a promising Bear Call Spread trade opportunity for EMERSON ELECTRIC (EMR) for the 1-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
EMR was recently trading at $84.03 and has an implied volatility of 30.85% for this period. Based on an analysis of the options available for EMR expiring on 1-Jul-2022, there is a 34.18% likelihood that the underlying will close within the analyzed range of $75.05-$84.10 at expiration. In this scenario, the average linear return for the trade would be 70.04%.
52 week low: EMERSON ELECTRIC recently reached a new 52-week low at $82.52. EMR had traded in the range $82.96-$105.99 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 EMR maintains its current direction and does not revert back to pricing on the bullish side of $84.03 on 1-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 EMERSON ELECTRIC closes at or below $84.30 on 1-Jul-2022. Based on our risk-neutral analysis, there is a 50.83% 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.