52-Week Low Alert: Trading today’s movement in STMICROELECTRONICS $STM

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

STM was recently trading at $32.95 and has an implied volatility of 46.47% for this period. Based on an analysis of the options available for STM expiring on 15-Jul-2022, there is a 34.22% likelihood that the underlying will close within the analyzed range of $29.36-$32.97 at expiration. In this scenario, the average linear return for the trade would be 29.73%.

52 week low: STMICROELECTRONICS recently reached a new 52-week low at $32.55. STM had traded in the range $32.59-$52.15 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 STM maintains its current direction and does not revert back to pricing on the bullish side of $32.95 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 STMICROELECTRONICS closes at or below $33.30 on 15-Jul-2022. Based on our risk-neutral analysis, there is a 53.44% 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.

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