Quantchabot has detected a promising Bear Call Spread trade opportunity for MICROSOFT (MSFT) for the 22-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MSFT was recently trading at $247.36 and has an implied volatility of 37.76% for this period. Based on an analysis of the options available for MSFT expiring on 22-Jul-2022, there is a 34.19% likelihood that the underlying will close within the analyzed range of $218.65-$247.66 at expiration. In this scenario, the average linear return for the trade would be 42.85%.
52 week low: MICROSOFT recently reached a new 52-week low at $244.22. MSFT had traded in the range $246.44-$349.67 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 MSFT maintains its current direction and does not revert back to pricing on the bullish side of $247.36 on 22-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 MICROSOFT closes at or below $247.73 on 22-Jul-2022. Based on our risk-neutral analysis, there is a 50.10% 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.