Quantchabot has detected a promising Bear Call Spread trade opportunity for CONOCOPHILLIPS (COP) for the 28-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
COP was recently trading at $101.65 and has an implied volatility of 49.20% for this period. Based on an analysis of the options available for COP expiring on 28-Oct-2022, there is a 34.19% likelihood that the underlying will close within the analyzed range of $86.19-$100.52 at expiration. In this scenario, the average linear return for the trade would be 27.07%.
Big -7.64% Change: After closing the last trading session at $110.06, CONOCOPHILLIPS opened today at $105.09 and has reached a low of $101.55.
Trade approach: A movement as big as -7.64% is a significantly bearish indicator, so this trade is designed to be profitable if COP maintains its current direction and does not revert back to pricing on the bullish side of $101.65 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 CONOCOPHILLIPS closes at or below $100.58 on 28-Oct-2022. Based on our risk-neutral analysis, there is a 50.15% 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.