Quantchabot has detected a promising Bear Call Spread trade opportunity for TAL EDUCATION GROUP (TAL) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TAL was recently trading at $5.16 and has an implied volatility of 91.68% for this period. Based on an analysis of the options available for TAL expiring on 20-Jan-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $3.57-$5.19 at expiration. In this scenario, the average linear return for the trade would be 27.99%.
Big -7.12% Change: After closing the last trading session at $5.55, TAL EDUCATION GROUP opened today at $5.40 and has reached a low of $5.12.
Trade approach: A movement as big as -7.12% is a significantly bearish indicator, so this trade is designed to be profitable if TAL maintains its current direction and does not revert back to pricing on the bullish side of $5.16 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 TAL EDUCATION GROUP closes at or below $5.27 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 51.65% 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.