Quantchabot has detected a promising Bear Call Spread trade opportunity for PETMED EXPRESS (PETS) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PETS was recently trading at $18.30 and has an implied volatility of 44.49% for this period. Based on an analysis of the options available for PETS expiring on 20-Jan-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $15.28-$18.43 at expiration. In this scenario, the average linear return for the trade would be 13.22%.
52 week low: PETMED EXPRESS recently reached a new 52-week low at $18.22. PETS had traded in the range $19.02-$30.99 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 PETS maintains its current direction and does not revert back to pricing on the bullish side of $18.30 on 20-Jan-2023. 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 PETMED EXPRESS closes at or below $18.45 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 50.28% 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.