Quantchabot has detected a promising Bear Call Spread trade opportunity for WALGREEN BOOTS ALLIANCE INC. (WBA) for the 6-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
WBA was recently trading at $22.16 and has an implied volatility of 28.92% for this period. Based on an analysis of the options available for WBA expiring on 6-Oct-2023, there is a 34.22% likelihood that the underlying will close within the analyzed range of $20.64-$22.25 at expiration. In this scenario, the average linear return for the trade would be 42.74%.
52 week low: WALGREEN BOOTS ALLIANCE INC. recently reached a new 52-week low at $21.49. WBA had traded in the range $21.92-$42.29 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 WBA maintains its current direction and does not revert back to pricing on the bullish side of $22.16 on 6-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 WALGREEN BOOTS ALLIANCE INC. closes at or below $22.27 on 6-Oct-2023. Based on our risk-neutral analysis, there is a 50.49% 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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