Quantchabot has detected a promising Bear Call Spread trade opportunity for MORGAN STANLEY (MS) for the 8-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MS was recently trading at $74.56 and has an implied volatility of 41.98% for this period. Based on an analysis of the options available for MS expiring on 8-Jul-2022, there is a 34.21% likelihood that the underlying will close within the analyzed range of $66.76-$74.62 at expiration. In this scenario, the average linear return for the trade would be 30.03%.
52 week low: MORGAN STANLEY recently reached a new 52-week low at $74.51. MS had traded in the range $76.75-$109.73 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 MS maintains its current direction and does not revert back to pricing on the bullish side of $74.56 on 8-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 MORGAN STANLEY closes at or below $74.65 on 8-Jul-2022. Based on our risk-neutral analysis, there is a 50.13% 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.