Quantchabot has detected a promising Bear Call Spread trade opportunity for BATH & BODY WORKS INC (BBWI) for the 19-Aug-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BBWI was recently trading at $31.63 and has an implied volatility of 63.35% for this period. Based on an analysis of the options available for BBWI expiring on 19-Aug-2022, there is a 34.17% likelihood that the underlying will close within the analyzed range of $24.53-$31.69 at expiration. In this scenario, the average linear return for the trade would be 30.24%.
52 week low: BATH & BODY WORKS INC recently reached a new 52-week low at $31.63. BBWI had traded in the range $31.68-$82.00 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 BBWI maintains its current direction and does not revert back to pricing on the bullish side of $31.63 on 19-Aug-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 BATH & BODY WORKS INC closes at or below $32.15 on 19-Aug-2022. Based on our risk-neutral analysis, there is a 52.25% 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.