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Quantchabot has detected a promising Bear Call Spread trade opportunity for ACADIA PHARMACEUTICALS (ACAD) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ACAD was recently trading at $42.04 and has an implied volatility of 59.45% for this period. Based on an analysis of the options available for ACAD expiring on 21-Feb-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $34.84-$42.12 at expiration. In this scenario, the average linear return for the trade would be 57.19%.
Big -7.07% Change: After closing the last trading session at $45.24, ACADIA PHARMACEUTICALS opened today at $45.39 and has reached a low of $40.60.
Trade approach: A movement as big as -7.07% is a significantly bearish indicator, so this trade is designed to be profitable if ACAD maintains its current direction and does not revert back to pricing on the bullish side of $42.04 on 21-Feb-2020. 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 ACADIA PHARMACEUTICALS closes at or below $42.40 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 51.41% 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.