Quantchabot has detected a promising Bear Call Spread trade opportunity for CHARLES SCHWAB (SCHW) for the 14-Apr-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SCHW was recently trading at $49.06 and has an implied volatility of 129.14% for this period. Based on an analysis of the options available for SCHW expiring on 14-Apr-2023, there is a 34.20% likelihood that the underlying will close within the analyzed range of $33.48-$49.28 at expiration. In this scenario, the average linear return for the trade would be 26.28%.
Big -16.41% Change: After closing the last trading session at $58.70, CHARLES SCHWAB opened today at $51.76 and has reached a low of $45.00.
Trade approach: A movement as big as -16.41% is a significantly bearish indicator, so this trade is designed to be profitable if SCHW maintains its current direction and does not revert back to pricing on the bullish side of $49.06 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 CHARLES SCHWAB closes at or below $49.52 on 14-Apr-2023. Based on our risk-neutral analysis, there is a 50.50% 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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