Quantchabot has detected a promising Bear Call Spread trade opportunity for DEVON ENERGY (DVN) for the 28-Apr-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DVN was recently trading at $46.10 and has an implied volatility of 46.83% for this period. Based on an analysis of the options available for DVN expiring on 28-Apr-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $39.35-$46.36 at expiration. In this scenario, the average linear return for the trade would be 45.96%.
52 week low: DEVON ENERGY recently reached a new 52-week low at $45.67. DVN had traded in the range $48.86-$79.40 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 DVN maintains its current direction and does not revert back to pricing on the bullish side of $46.10 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 DEVON ENERGY closes at or below $46.50 on 28-Apr-2023. Based on our risk-neutral analysis, there is a 50.75% 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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