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Quantchabot has detected a promising Short Risk Reversal trade opportunity for INTRA-CELLULAR THERAPIES INC. (ITCI) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ITCI was recently trading at $27.39 and has an implied volatility of 78.99% for this period. Based on an analysis of the options available for ITCI expiring on 21-Feb-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $20.89-$27.45 at expiration. In this scenario, the average linear return for the trade would be 52.98%.
Big -11.64% Change: After closing the last trading session at $31.00, INTRA-CELLULAR THERAPIES INC. opened today at $27.64 and has reached a low of $26.77.
Trade approach: A movement as big as -11.64% is a significantly bearish indicator, so this trade is designed to be profitable if ITCI maintains its current direction and does not revert back to pricing on the bullish side of $27.39 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 INTRA-CELLULAR THERAPIES INC. closes at or below $27.60 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 50.81% 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.