Quantchabot has detected a promising Bear Call Spread trade opportunity for SEMTECH (SMTC) for the 17-Nov-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SMTC was recently trading at $15.58 and has an implied volatility of 62.68% for this period. Based on an analysis of the options available for SMTC expiring on 17-Nov-2023, there is a 34.21% likelihood that the underlying will close within the analyzed range of $13.09-$15.65 at expiration. In this scenario, the average linear return for the trade would be 23.99%.
Big -21.79% Change: After closing the last trading session at $19.92, SEMTECH opened today at $16.63 and has reached a low of $15.50.
Trade approach: A movement as big as -21.79% is a significantly bearish indicator, so this trade is designed to be profitable if SMTC maintains its current direction and does not revert back to pricing on the bullish side of $15.58 on 17-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 bearish strategy, the trade would be profitable if SEMTECH closes at or below $15.70 on 17-Nov-2023. Based on our risk-neutral analysis, there is a 50.68% 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.