Quantchabot has detected a promising Bear Call Spread trade opportunity for CF INDUSTRIES HOLDINGS (CF) for the 28-Apr-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CF was recently trading at $76.03 and has an implied volatility of 40.04% for this period. Based on an analysis of the options available for CF expiring on 28-Apr-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $66.38-$76.48 at expiration. In this scenario, the average linear return for the trade would be 30.95%.
52 week low: CF INDUSTRIES HOLDINGS recently reached a new 52-week low at $75.80. CF had traded in the range $78.23-$119.60 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 CF maintains its current direction and does not revert back to pricing on the bullish side of $76.03 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 CF INDUSTRIES HOLDINGS closes at or below $76.50 on 28-Apr-2023. Based on our risk-neutral analysis, there is a 50.07% 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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