Quantchabot has detected a promising Bear Call Spread trade opportunity for CLOUDFLARE INC (NET) for the 3-Feb-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NET was recently trading at $42.78 and has an implied volatility of 75.44% for this period. Based on an analysis of the options available for NET expiring on 3-Feb-2023, there is a 34.40% likelihood that the underlying will close within the analyzed range of $37.86-$42.84 at expiration. In this scenario, the average linear return for the trade would be 29.11%.
Big -8.34% Change: After closing the last trading session at $46.67, CLOUDFLARE INC opened today at $44.11 and has reached a low of $42.26.
Trade approach: A movement as big as -8.34% 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 $42.78 on 3-Feb-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 $42.85 on 3-Feb-2023. Based on our risk-neutral analysis, there is a 50.12% 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.