Quantchabot has detected a promising Bear Call Spread trade opportunity for NOVARTIS (NVS) for the 21-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NVS was recently trading at $78.79 and has an implied volatility of 21.44% for this period. Based on an analysis of the options available for NVS expiring on 21-Oct-2022, there is a 34.20% likelihood that the underlying will close within the analyzed range of $74.20-$78.96 at expiration. In this scenario, the average linear return for the trade would be 36.78%.
52 week low: NOVARTIS recently reached a new 52-week low at $78.58. NVS had traded in the range $79.09-$94.26 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 NVS maintains its current direction and does not revert back to pricing on the bullish side of $78.79 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 NOVARTIS closes at or below $79.00 on 21-Oct-2022. Based on our risk-neutral analysis, there is a 50.31% 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.