Quantchabot has detected a promising Bear Call Spread trade opportunity for BANK OF AMERICA CORPORATION (BAC) for the 14-Apr-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BAC was recently trading at $28.98 and has an implied volatility of 48.87% for this period. Based on an analysis of the options available for BAC expiring on 14-Apr-2023, there is a 34.20% likelihood that the underlying will close within the analyzed range of $25.14-$29.10 at expiration. In this scenario, the average linear return for the trade would be 32.12%.
52 week low: BANK OF AMERICA CORPORATION recently reached a new 52-week low at $27.87. BAC had traded in the range $29.31-$44.63 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 BAC maintains its current direction and does not revert back to pricing on the bullish side of $28.98 on 14-Apr-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 BANK OF AMERICA CORPORATION closes at or below $29.13 on 14-Apr-2023. Based on our risk-neutral analysis, there is a 50.26% 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.
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