Quantchabot has detected a promising Bear Call Spread trade opportunity for BANK OF MONTREAL (BMO) for the 17-Nov-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BMO was recently trading at $78.60 and has an implied volatility of 24.36% for this period. Based on an analysis of the options available for BMO expiring on 17-Nov-2023, there is a 34.21% likelihood that the underlying will close within the analyzed range of $72.73-$77.87 at expiration. In this scenario, the average linear return for the trade would be 41.05%.
52 week low: BANK OF MONTREAL recently reached a new 52-week low at $78.48. BMO had traded in the range $78.50-$102.79 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 BMO maintains its current direction and does not revert back to pricing on the bullish side of $78.60 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 BANK OF MONTREAL closes at or below $78.25 on 17-Nov-2023. Based on our risk-neutral analysis, there is a 52.86% 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.