Quantchabot has detected a new Bear Call Spread trade opportunity for VALERO ENERGY (VLO) for the 24-Jan-2025 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
VLO was recently trading at $117.01 and has an implied volatility of 33.18% for this period. Based on an analysis of the options available for VLO expiring on 24-Jan-2025, there is a 34.22% likelihood that the underlying will close within the analyzed range of $106.37-$117.49 at expiration. In this scenario, the average linear return for the trade would be 67.99%.
52 week low: VALERO ENERGY recently reached a new 52-week low at $117.01. VLO had traded in the range $117.14-$184.79 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 VLO maintains its current direction and does not revert back to pricing on the bullish side of $117.01 on 24-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 VALERO ENERGY closes at or below $117.55 on 24-Jan-2025. Based on our risk-neutral analysis, there is a 50.23% 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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