Quantchabot has detected a promising Bear Call Spread trade opportunity for LGI HOMES INC. COMMON STOCK (LGIH) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LGIH was recently trading at $116.81 and has an implied volatility of 39.32% for this period. Based on an analysis of the options available for LGIH expiring on 20-Oct-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $102.37-$117.65 at expiration. In this scenario, the average linear return for the trade would be 34.95%.
Big -7.08% Change: After closing the last trading session at $125.71, LGI HOMES INC. COMMON STOCK opened today at $124.09 and has reached a low of $116.61.
Trade approach: A movement as big as -7.08% is a significantly bearish indicator, so this trade is designed to be profitable if LGIH maintains its current direction and does not revert back to pricing on the bullish side of $116.81 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 LGI HOMES INC. COMMON STOCK closes at or below $118.15 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 51.24% 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.