Quantchabot has detected a promising Bear Call Spread trade opportunity for ALTRIA (MO) for the 22-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MO was recently trading at $41.69 and has an implied volatility of 33.90% for this period. Based on an analysis of the options available for MO expiring on 22-Jul-2022, there is a 34.20% likelihood that the underlying will close within the analyzed range of $37.82-$41.73 at expiration. In this scenario, the average linear return for the trade would be 58.59%.
52 week low: ALTRIA recently reached a new 52-week low at $41.65. MO had traded in the range $42.53-$57.05 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 MO maintains its current direction and does not revert back to pricing on the bullish side of $41.69 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 ALTRIA closes at or below $41.75 on 22-Jul-2022. Based on our risk-neutral analysis, there is a 50.22% 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.