Quantchabot has detected a promising Bear Call Spread trade opportunity for BAIDU (BIDU) for the 22-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BIDU was recently trading at $132.61 and has an implied volatility of 62.15% for this period. Based on an analysis of the options available for BIDU expiring on 22-Jul-2022, there is a 34.19% likelihood that the underlying will close within the analyzed range of $108.19-$132.77 at expiration. In this scenario, the average linear return for the trade would be 19.16%.
Big -7.18% Change: After closing the last trading session at $142.87, BAIDU opened today at $139.17 and has reached a low of $130.51.
Trade approach: A movement as big as -7.18% is a significantly bearish indicator, so this trade is designed to be profitable if BIDU maintains its current direction and does not revert back to pricing on the bullish side of $132.61 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 BAIDU closes at or below $132.85 on 22-Jul-2022. Based on our risk-neutral analysis, there is a 50.12% 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.