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Quantchabot has detected a promising Bear Call Spread trade opportunity for COLLEGIUM PHARMACEUTICAL INC. COMMON STOCK (COLL) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
COLL was recently trading at $22.15 and has an implied volatility of 86.02% for this period. Based on an analysis of the options available for COLL expiring on 21-Feb-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $18.46-$22.16 at expiration. In this scenario, the average linear return for the trade would be 13.64%.
Big -12.97% Change: After closing the last trading session at $25.45, COLLEGIUM PHARMACEUTICAL INC. COMMON STOCK opened today at $24.00 and has reached a low of $21.90.
Trade approach: A movement as big as -12.97% is a significantly bearish indicator, so this trade is designed to be profitable if COLL maintains its current direction and does not revert back to pricing on the bullish side of $22.15 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 COLLEGIUM PHARMACEUTICAL INC. COMMON STOCK closes at or below $22.80 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 56.18% 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.