52-Week Low Alert: Trading today’s movement in BANK OF MONTREAL $BMO

Quantchabot has detected a promising Bear Call Spread trade opportunity for BANK OF MONTREAL (BMO) for the 18-Nov-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

BMO was recently trading at $89.42 and has an implied volatility of 28.61% for this period. Based on an analysis of the options available for BMO expiring on 18-Nov-2022, there is a 34.17% likelihood that the underlying will close within the analyzed range of $79.28-$88.74 at expiration. In this scenario, the average linear return for the trade would be 29.16%.

52 week low: BANK OF MONTREAL recently reached a new 52-week low at $89.20. BMO had traded in the range $90.41-$122.77 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 BMO maintains its current direction and does not revert back to pricing on the bullish side of $89.42 on 18-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 BANK OF MONTREAL closes at or below $89.00 on 18-Nov-2022. Based on our risk-neutral analysis, there is a 51.04% 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.