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Quantchabot has detected a promising Bear Call Spread trade opportunity for HUYA INC (HUYA) for the 5-Jun-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HUYA was recently trading at $15.72 and has an implied volatility of 76.81% for this period. Based on an analysis of the options available for HUYA expiring on 5-Jun-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $13.50-$15.72 at expiration. In this scenario, the average linear return for the trade would be 51.81%.
Big -8.01% Change: After closing the last trading session at $17.09, HUYA INC opened today at $16.52 and has reached a low of $15.57.
Trade approach: A movement as big as -8.01% is a significantly bearish indicator, so this trade is designed to be profitable if HUYA maintains its current direction and does not revert back to pricing on the bullish side of $15.72 on 5-Jun-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 HUYA INC closes at or below $15.85 on 5-Jun-2020. Based on our risk-neutral analysis, there is a 52.11% 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.