Quantchabot has detected a promising Bear Call Spread trade opportunity for VALARIS LTD (VAL) for the 15-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
VAL was recently trading at $46.97 and has an implied volatility of 55.70% for this period. Based on an analysis of the options available for VAL expiring on 15-Jul-2022, there is a 34.22% likelihood that the underlying will close within the analyzed range of $40.78-$47.00 at expiration. In this scenario, the average linear return for the trade would be 11.69%.
Big -7.04% Change: After closing the last trading session at $50.52, VALARIS LTD opened today at $48.00 and has reached a low of $45.95.
Trade approach: A movement as big as -7.04% is a significantly bearish indicator, so this trade is designed to be profitable if VAL maintains its current direction and does not revert back to pricing on the bullish side of $46.97 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 VALARIS LTD closes at or below $47.40 on 15-Jul-2022. Based on our risk-neutral analysis, there is a 52.41% 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.