Costamare's (CMRE) shares got downgraded today by Morgan Stanley (MS) and given a new, much lower, target price of $7.50 per share on fears of dividend cuts. The stock subsequently collapsed by over 15% in today's session on high volume:(Source: Google Finance)With the violent move, the stock's options' implied volatility (IV) spiked, which gave an attractive opportunity for selling:(Source: optionistic.com)As you can see in the chart above, the options are expensive in relative terms. Although I think the company's financial situation is modest to sustain current dividend payments (even though the company paid at least twice as many dividends as it made net profits in 2015), I am not going to argue with Morgan Stanley, at least on the matters of cash flows, because I do not have enough information. On the other hand, I think there is a high likelihood that the stock will stay near current market price for the next little while (definitely for the duration of the proposed trade). The nearest earnings call is on July 19, 2016, so the stock will not react violently to new information during the next two weeks, until the expiration of the front month option:(Source: optionsprofitcalculator.com)The two-week trade has the following risk-reward distribution:(Source: optionsprofitcalculator.com)The risk-reward ratio of about 1:1 is not particularly attractive with this type of trade but the probability of the stock being down is quite high in the absence of positive macroeconomic or company news. In addition, the ~15% "window of safety" is quite wide for such a short-duration trade (implies a ~76% annual volatility):(Source: Google Finance. Calculations by author)It is evident that the implied volatility is about 33% higher than realized volatility over the last 52 weeks. Hence, I think the options are overpriced. The duration of the trade is quite attractive, while the probability of success seems high based on the expected distribution of stock prices. What do you think of this trade?