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Quantchabot has detected a promising Bear Call Spread trade opportunity for YY INC. (YY) for the 17-Jul-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
YY was recently trading at $58.08 and has an implied volatility of 55.47% for this period. Based on an analysis of the options available for YY expiring on 17-Jul-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $46.72-$58.10 at expiration. In this scenario, the average linear return for the trade would be 77.17%.
Big -8.48% Change: After closing the last trading session at $63.46, YY INC. opened today at $61.76 and has reached a low of $58.00.
Trade approach: A movement as big as -8.48% is a significantly bearish indicator, so this trade is designed to be profitable if YY maintains its current direction and does not revert back to pricing on the bullish side of $58.08 on 17-Jul-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 YY INC. closes at or below $59.60 on 17-Jul-2020. Based on our risk-neutral analysis, there is a 54.67% 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.