Quantchabot has detected a promising Bear Call Spread trade opportunity for CVS HEALTH CORP (CVS) for the 28-Apr-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CVS was recently trading at $77.08 and has an implied volatility of 25.27% for this period. Based on an analysis of the options available for CVS expiring on 28-Apr-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $70.87-$77.57 at expiration. In this scenario, the average linear return for the trade would be 34.87%.
52 week low: CVS HEALTH CORP recently reached a new 52-week low at $75.90. CVS had traded in the range $76.66-$109.69 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 CVS maintains its current direction and does not revert back to pricing on the bullish side of $77.08 on 28-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 CVS HEALTH CORP closes at or below $77.69 on 28-Apr-2023. Based on our risk-neutral analysis, there is a 50.69% 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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