The automated Quantcha Trade Ideas Service has detected a promising Bear Call Spread trade opportunity for SOUTHERN (SO) for the 16-Feb-2018 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

SO was recently trading at $44.37 and has an implied volatility of 16.56% for this period. Based on an analysis of the options available for SO expiring on 16-Feb-2018, there is a 34.14% likelihood that the underlying will close within the analyzed range of $42.29-$44.54 at expiration. In this scenario, the average linear return for the trade would be 51.23%.

52 week low: SOUTHERN recently reached a new 52-week low at $43.16. SO had traded in the range $44.26-$53.51 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 SO maintains its current direction and does not revert back to pricing on the bullish side of $44.37 on 16-Feb-2018. 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 SOUTHERN closes at or below $44.73 on 16-Feb-2018. Based on our risk-neutral analysis, there is a 53.20% 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.