Quantchabot has detected a promising Bear Call Spread trade opportunity for CANADIAN IMP BK OF CMRC (CM) for the 19-Aug-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CM was recently trading at $48.55 and has an implied volatility of 28.88% for this period. Based on an analysis of the options available for CM expiring on 19-Aug-2022, there is a 34.17% likelihood that the underlying will close within the analyzed range of $42.77-$47.97 at expiration. In this scenario, the average linear return for the trade would be 37.49%.
52 week low: CANADIAN IMP BK OF CMRC recently reached a new 52-week low at $48.54. CM had traded in the range $48.78-$132.48 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 CM maintains its current direction and does not revert back to pricing on the bullish side of $48.55 on 19-Aug-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 CANADIAN IMP BK OF CMRC closes at or below $48.10 on 19-Aug-2022. Based on our risk-neutral analysis, there is a 50.91% 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.