The automated Quantcha Trade Ideas Service has detected a promising Bear Put Spread trade opportunity for CLIFFS NATURAL RESOURCES (CLF) for the 21-Jul-2017 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

CLF was recently trading at $5.68 and has an implied volatility of 59.41% for this period. Based on an analysis of the options available for CLF expiring on 21-Jul-2017, there is a 34.14% likelihood that the underlying will close within the analyzed range of $4.55-$5.71 at expiration. In this scenario, the average linear return for the trade would be 38.07%.

Big -8.39% Change: After closing the last trading session at $6.20, CLIFFS NATURAL RESOURCES opened today at $6.10 and has reached a low of $5.65.

Trade approach: A movement as big as -8.39% is a significantly bearish indicator, so this trade is designed to be profitable if CLF maintains its current direction and does not revert back to pricing on the bullish side of $5.68 on 21-Jul-2017. 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 CLIFFS NATURAL RESOURCES closes at or below $5.72 on 21-Jul-2017. Based on our risk-neutral analysis, there is a 50.39% 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.