Quantchabot has detected a promising Bear Call Spread trade opportunity for AMERICAN FINANCIAL GROUP (AFG) for the 21-Apr-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AFG was recently trading at $116.55 and has an implied volatility of 34.11% for this period. Based on an analysis of the options available for AFG expiring on 21-Apr-2023, there is a 34.19% likelihood that the underlying will close within the analyzed range of $105.05-$117.05 at expiration. In this scenario, the average linear return for the trade would be 16.77%.
52 week low: AMERICAN FINANCIAL GROUP recently reached a new 52-week low at $114.57. AFG had traded in the range $116.70-$152.29 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 AFG maintains its current direction and does not revert back to pricing on the bullish side of $116.55 on 21-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 AMERICAN FINANCIAL GROUP closes at or below $118.75 on 21-Apr-2023. Based on our risk-neutral analysis, there is a 55.31% 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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