Quantchabot has detected a promising Bear Call Spread trade opportunity for M/I HOMES (MHO) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MHO was recently trading at $93.15 and has an implied volatility of 36.84% for this period. Based on an analysis of the options available for MHO expiring on 20-Oct-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $82.35-$93.81 at expiration. In this scenario, the average linear return for the trade would be 22.76%.
Big -7.58% Change: After closing the last trading session at $100.79, M/I HOMES opened today at $99.78 and has reached a low of $91.93.
Trade approach: A movement as big as -7.58% is a significantly bearish indicator, so this trade is designed to be profitable if MHO maintains its current direction and does not revert back to pricing on the bullish side of $93.15 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 M/I HOMES closes at or below $94.30 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 51.60% 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.