Quantchabot has detected a promising Bear Call Spread trade opportunity for DOW INC (DOW) for the 15-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DOW was recently trading at $52.18 and has an implied volatility of 35.51% for this period. Based on an analysis of the options available for DOW expiring on 15-Jul-2022, there is a 34.22% likelihood that the underlying will close within the analyzed range of $47.70-$52.22 at expiration. In this scenario, the average linear return for the trade would be 27.89%.
52 week low: DOW INC recently reached a new 52-week low at $51.57. DOW had traded in the range $52.07-$71.86 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 DOW maintains its current direction and does not revert back to pricing on the bullish side of $52.18 on 15-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 DOW INC closes at or below $52.25 on 15-Jul-2022. Based on our risk-neutral analysis, there is a 50.28% 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.