Quantchabot has detected a promising Bull Call Spread trade opportunity for DIAMONDBACK ENERGY INC (FANG) for the 3-Nov-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
FANG was recently trading at $169.16 and has an implied volatility of 27.42% for this period. Based on an analysis of the options available for FANG expiring on 3-Nov-2023, there is a 34.24% likelihood that the underlying will close within the analyzed range of $169.63-$180.20 at expiration. In this scenario, the average linear return for the trade would be 10.93%.
52 week high: DIAMONDBACK ENERGY INC recently reached a new 52-week high at $169.36. FANG had traded in the range $119.01-$168.95 over the past year.
Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if FANG maintains its current direction and does not revert back to pricing on the bearish side of $169.16 on 3-Nov-2023. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bullish strategy, the trade would be profitable if DIAMONDBACK ENERGY INC closes at or above $168.15 on 3-Nov-2023. Based on our risk-neutral analysis, there is a 55.79% 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.