Big Loser Alert: Trading today’s -7.4% move in CLOUDFLARE INC $NET

Quantchabot has detected a promising Bear Call Spread trade opportunity for CLOUDFLARE INC (NET) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

NET was recently trading at $48.78 and has an implied volatility of 77.78% for this period. Based on an analysis of the options available for NET expiring on 20-Jan-2023, there is a 34.17% likelihood that the underlying will close within the analyzed range of $35.39-$49.12 at expiration. In this scenario, the average linear return for the trade would be 14.70%.

Big -7.40% Change: After closing the last trading session at $52.68, CLOUDFLARE INC opened today at $50.48 and has reached a low of $48.46.

Trade approach: A movement as big as -7.40% is a significantly bearish indicator, so this trade is designed to be profitable if NET maintains its current direction and does not revert back to pricing on the bullish side of $48.78 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 CLOUDFLARE INC closes at or below $49.13 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 50.03% 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.