Quantchabot has detected a promising Bear Call Spread trade opportunity for XCEL ENERGY (XEL) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
XEL was recently trading at $55.44 and has an implied volatility of 19.01% for this period. Based on an analysis of the options available for XEL expiring on 20-Oct-2023, there is a 34.19% likelihood that the underlying will close within the analyzed range of $51.71-$55.31 at expiration. In this scenario, the average linear return for the trade would be 37.72%.
52 week low: XCEL ENERGY recently reached a new 52-week low at $55.11. XEL had traded in the range $56.08-$77.66 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 XEL maintains its current direction and does not revert back to pricing on the bullish side of $55.44 on 20-Oct-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 XCEL ENERGY closes at or below $55.40 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 51.03% 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.