Quantchabot has detected a promising Bear Call Spread trade opportunity for CENOVUS ENERGY (CVE) for the 21-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CVE was recently trading at $15.75 and has an implied volatility of 59.16% for this period. Based on an analysis of the options available for CVE expiring on 21-Oct-2022, there is a 34.21% likelihood that the underlying will close within the analyzed range of $13.37-$15.78 at expiration. In this scenario, the average linear return for the trade would be 26.12%.
Big -7.79% Change: After closing the last trading session at $17.08, CENOVUS ENERGY opened today at $16.25 and has reached a low of $15.60.
Trade approach: A movement as big as -7.79% is a significantly bearish indicator, so this trade is designed to be profitable if CVE maintains its current direction and does not revert back to pricing on the bullish side of $15.75 on 21-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 CENOVUS ENERGY closes at or below $15.80 on 21-Oct-2022. Based on our risk-neutral analysis, there is a 50.24% 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.