Quantchabot has detected a promising Bear Call Spread trade opportunity for MARATHON OIL (MRO) for the 28-Apr-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MRO was recently trading at $21.57 and has an implied volatility of 49.64% for this period. Based on an analysis of the options available for MRO expiring on 28-Apr-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $18.23-$21.69 at expiration. In this scenario, the average linear return for the trade would be 38.12%.
Big -7.15% Change: After closing the last trading session at $23.23, MARATHON OIL opened today at $22.20 and has reached a low of $21.50.
Trade approach: A movement as big as -7.15% is a significantly bearish indicator, so this trade is designed to be profitable if MRO maintains its current direction and does not revert back to pricing on the bullish side of $21.57 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 MARATHON OIL closes at or below $21.70 on 28-Apr-2023. Based on our risk-neutral analysis, there is a 50.10% 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.
Leave a Reply
You must be logged in to post a comment.