Quantchabot has detected a new Short Risk Reversal trade opportunity for TIMKEN (TKR) for the 17-Jan-2025 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TKR was recently trading at $72.09 and has an implied volatility of 26.91% for this period. Based on an analysis of the options available for TKR expiring on 17-Jan-2025, there is a 34.23% likelihood that the underlying will close within the analyzed range of $67.09-$72.35 at expiration. In this scenario, the average linear return for the trade would be 15.50%.
52 week low: TIMKEN recently reached a new 52-week low at $70.20. TKR had traded in the range $71.70-$94.70 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 TKR maintains its current direction and does not revert back to pricing on the bullish side of $72.09 on 17-Jan-2025. 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 TIMKEN closes at or below $72.90 on 17-Jan-2025. Based on our risk-neutral analysis, there is a 54.05% 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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