Big Loser Alert: Trading today’s -7.6% move in BP $BP

Quantchabot has detected a promising Bear Call Spread trade opportunity for BP (BP) for the 28-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

BP was recently trading at $28.45 and has an implied volatility of 38.98% for this period. Based on an analysis of the options available for BP expiring on 28-Oct-2022, there is a 34.19% likelihood that the underlying will close within the analyzed range of $25.25-$28.53 at expiration. In this scenario, the average linear return for the trade would be 37.69%.

Big -7.60% Change: After closing the last trading session at $30.79, BP opened today at $29.06 and has reached a low of $28.32.

Trade approach: A movement as big as -7.60% is a significantly bearish indicator, so this trade is designed to be profitable if BP maintains its current direction and does not revert back to pricing on the bullish side of $28.45 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 BP closes at or below $28.65 on 28-Oct-2022. Based on our risk-neutral analysis, there is a 51.41% 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.