Quantchabot has detected a promising Bear Call Spread trade opportunity for U.S. BANCORP (USB) for the 7-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
USB was recently trading at $43.32 and has an implied volatility of 32.11% for this period. Based on an analysis of the options available for USB expiring on 7-Oct-2022, there is a 34.27% likelihood that the underlying will close within the analyzed range of $40.13-$42.89 at expiration. In this scenario, the average linear return for the trade would be 46.91%.
52 week low: U.S. BANCORP recently reached a new 52-week low at $43.16. USB had traded in the range $43.74-$63.57 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 USB maintains its current direction and does not revert back to pricing on the bullish side of $43.32 on 7-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 U.S. BANCORP closes at or below $43.00 on 7-Oct-2022. Based on our risk-neutral analysis, there is a 51.60% 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.