Big Loser Alert: Trading today’s -15.4% move in ABIOMED $ABMD

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Quantchabot has detected a promising Bear Call Spread trade opportunity for ABIOMED (ABMD) for the 17-Jan-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

ABMD was recently trading at $159.94 and has an implied volatility of 73.15% for this period. Based on an analysis of the options available for ABMD expiring on 17-Jan-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $148.74-$159.97 at expiration. In this scenario, the average linear return for the trade would be 42.17%.

Big -15.40% Change: After closing the last trading session at $189.06, ABIOMED opened today at $166.50 and has reached a low of $159.52.

Trade approach: A movement as big as -15.40% is a significantly bearish indicator, so this trade is designed to be profitable if ABMD maintains its current direction and does not revert back to pricing on the bullish side of $159.94 on 17-Jan-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 ABIOMED closes at or below $160.30 on 17-Jan-2020. Based on our risk-neutral analysis, there is a 51.12% 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.