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Quantchabot has detected a promising Bear Put Spread trade opportunity for CHINA LIFE INSURANCE (LFC) for the 17-Sep-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

LFC was recently trading at $8.28 and has an implied volatility of 31.44% for this period. Based on an analysis of the options available for LFC expiring on 17-Sep-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $7.35-$8.28 at expiration. In this scenario, the average linear return for the trade would be 26.49%.

52 week low: CHINA LIFE INSURANCE recently reached a new 52-week low at $8.21. LFC had traded in the range $8.65-$12.99 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 LFC maintains its current direction and does not revert back to pricing on the bullish side of $8.28 on 17-Sep-2021. 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 CHINA LIFE INSURANCE closes at or below $8.30 on 17-Sep-2021. Based on our risk-neutral analysis, there is a 50.77% 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.