Quantcha now offering unlimited commission-free options trading.
Quantchabot has detected a promising Covered Put trade opportunity for LUCKIN COFFEE INC. AMERICAN DEPOSITARY SHARES (LK) for the 29-May-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LK was recently trading at $1.46 and has an implied volatility of 399.65% for this period. Based on an analysis of the options available for LK expiring on 29-May-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $0.83-$1.46 at expiration. In this scenario, the average linear return for the trade would be 93.62%.
Big -27.61% Change: After closing the last trading session at $2.01, LUCKIN COFFEE INC. AMERICAN DEPOSITARY SHARES opened today at $1.73 and has reached a low of $1.33.
Trade approach: A movement as big as -27.61% is a significantly bearish indicator, so this trade is designed to be profitable if LK maintains its current direction and does not revert back to pricing on the bullish side of $1.46 on 29-May-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 LUCKIN COFFEE INC. AMERICAN DEPOSITARY SHARES closes at or below $1.83 on 29-May-2020. Based on our risk-neutral analysis, there is a 65.71% 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.