Quantchabot has detected a promising Bear Call Spread trade opportunity for DEVON ENERGY (DVN) for the 28-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DVN was recently trading at $58.36 and has an implied volatility of 58.16% for this period. Based on an analysis of the options available for DVN expiring on 28-Oct-2022, there is a 34.19% likelihood that the underlying will close within the analyzed range of $48.78-$58.52 at expiration. In this scenario, the average linear return for the trade would be 31.40%.
Big -7.54% Change: After closing the last trading session at $63.12, DEVON ENERGY opened today at $60.24 and has reached a low of $57.47.
Trade approach: A movement as big as -7.54% is a significantly bearish indicator, so this trade is designed to be profitable if DVN maintains its current direction and does not revert back to pricing on the bullish side of $58.36 on 28-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 DEVON ENERGY closes at or below $58.52 on 28-Oct-2022. Based on our risk-neutral analysis, there is a 50.01% 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.