Big Gainer Alert: Trading today’s 7.3% move in PINDUODUO INC. AMERICAN DEPOSITARY SHARES $PDD

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Quantchabot has detected a promising Bull Put Spread trade opportunity for PINDUODUO INC. AMERICAN DEPOSITARY SHARES (PDD) for the 14-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

PDD was recently trading at $40.59 and has an implied volatility of 41.67% for this period. Based on an analysis of the options available for PDD expiring on 14-Feb-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $40.68-$46.96 at expiration. In this scenario, the average linear return for the trade would be 48.20%.

Big 7.32% Change: After closing the last trading session at $37.82, PINDUODUO INC. AMERICAN DEPOSITARY SHARES opened today at $38.50 and has reached a high of $40.65.

Trade approach: A movement as big as 7.32% is a significantly bullish indicator, so this trade is designed to be profitable if PDD maintains its current direction and does not revert back to pricing on the bearish side of $40.59 on 14-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 bullish strategy, the trade would be profitable if PINDUODUO INC. AMERICAN DEPOSITARY SHARES closes at or above $40.65 on 14-Feb-2020. Based on our risk-neutral analysis, there is a 50.18% 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.