Quantchabot has detected a promising Bear Call Spread trade opportunity for INSTALLED BUILDING PRODUCTS (IBP) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
IBP was recently trading at $134.12 and has an implied volatility of 36.30% for this period. Based on an analysis of the options available for IBP expiring on 20-Oct-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $118.50-$134.74 at expiration. In this scenario, the average linear return for the trade would be 26.72%.
Big -8.33% Change: After closing the last trading session at $146.30, INSTALLED BUILDING PRODUCTS opened today at $144.51 and has reached a low of $134.12.
Trade approach: A movement as big as -8.33% is a significantly bearish indicator, so this trade is designed to be profitable if IBP maintains its current direction and does not revert back to pricing on the bullish side of $134.12 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 INSTALLED BUILDING PRODUCTS closes at or below $135.20 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 51.06% 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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