Quantchabot has detected a promising Bear Call Spread trade opportunity for EATON PUBLIC (ETN) for the 15-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ETN was recently trading at $125.59 and has an implied volatility of 30.69% for this period. Based on an analysis of the options available for ETN expiring on 15-Jul-2022, there is a 34.22% likelihood that the underlying will close within the analyzed range of $116.22-$125.68 at expiration. In this scenario, the average linear return for the trade would be 31.24%.
52 week low: EATON PUBLIC recently reached a new 52-week low at $123.69. ETN had traded in the range $124.57-$175.72 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 ETN maintains its current direction and does not revert back to pricing on the bullish side of $125.59 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 EATON PUBLIC closes at or below $125.70 on 15-Jul-2022. Based on our risk-neutral analysis, there is a 50.09% 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.