Big Loser Alert: Trading today’s -7.2% move in DCP MIDSTREAM LP $DCP

Quantchabot has detected a promising Bear Call Spread trade opportunity for DCP MIDSTREAM LP (DCP) for the 15-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

DCP was recently trading at $28.48 and has an implied volatility of 53.96% for this period. Based on an analysis of the options available for DCP expiring on 15-Jul-2022, there is a 34.22% likelihood that the underlying will close within the analyzed range of $24.84-$28.50 at expiration. In this scenario, the average linear return for the trade would be 26.48%.

Big -7.22% Change: After closing the last trading session at $30.69, DCP MIDSTREAM LP opened today at $29.52 and has reached a low of $28.43.

Trade approach: A movement as big as -7.22% is a significantly bearish indicator, so this trade is designed to be profitable if DCP maintains its current direction and does not revert back to pricing on the bullish side of $28.48 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 DCP MIDSTREAM LP closes at or below $28.50 on 15-Jul-2022. Based on our risk-neutral analysis, there is a 50.05% 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.