Quantchabot has detected a promising Bear Call Spread trade opportunity for LITHIUM AMERICAS INC (LAC) for the 27-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LAC was recently trading at $8.21 and has an implied volatility of 67.83% for this period. Based on an analysis of the options available for LAC expiring on 27-Oct-2023, there is a 34.35% likelihood that the underlying will close within the analyzed range of $7.36-$8.22 at expiration. In this scenario, the average linear return for the trade would be 38.44%.
Big -9.78% Change: After closing the last trading session at $9.10, LITHIUM AMERICAS INC opened today at $8.86 and has reached a low of $8.20.
Trade approach: A movement as big as -9.78% is a significantly bearish indicator, so this trade is designed to be profitable if LAC maintains its current direction and does not revert back to pricing on the bullish side of $8.21 on 27-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 LITHIUM AMERICAS INC closes at or below $8.30 on 27-Oct-2023. Based on our risk-neutral analysis, there is a 53.44% 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.