Quantchabot has detected a promising Bear Call Spread trade opportunity for DXC TECHNOLOGY CO (DXC) for the 21-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DXC was recently trading at $26.31 and has an implied volatility of 55.44% for this period. Based on an analysis of the options available for DXC expiring on 21-Oct-2022, there is a 34.16% likelihood that the underlying will close within the analyzed range of $20.44-$26.44 at expiration. In this scenario, the average linear return for the trade would be 76.03%.
52 week low: DXC TECHNOLOGY CO recently reached a new 52-week low at $25.25. DXC had traded in the range $27.28-$44.18 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 DXC maintains its current direction and does not revert back to pricing on the bullish side of $26.31 on 21-Oct-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 DXC TECHNOLOGY CO closes at or below $26.45 on 21-Oct-2022. Based on our risk-neutral analysis, there is a 50.08% 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.