Quantchabot has detected a promising Bear Call Spread trade opportunity for NVIDIA (NVDA) for the 4-Nov-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NVDA was recently trading at $126.14 and has an implied volatility of 58.35% for this period. Based on an analysis of the options available for NVDA expiring on 4-Nov-2022, there is a 34.18% likelihood that the underlying will close within the analyzed range of $103.41-$126.54 at expiration. In this scenario, the average linear return for the trade would be 21.03%.
52 week low: NVIDIA recently reached a new 52-week low at $125.21. NVDA had traded in the range $126.17-$346.47 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 NVDA maintains its current direction and does not revert back to pricing on the bullish side of $126.14 on 4-Nov-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 NVIDIA closes at or below $126.65 on 4-Nov-2022. Based on our risk-neutral analysis, there is a 50.18% 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.