Big Loser Alert: Trading today’s -9.2% move in 51JOB $JOBS

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Quantchabot has detected a promising Short Risk Reversal trade opportunity for 51JOB (JOBS) for the 17-Jul-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

JOBS was recently trading at $58.92 and has an implied volatility of 51.82% for this period. Based on an analysis of the options available for JOBS expiring on 17-Jul-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $48.09-$58.94 at expiration. In this scenario, the average linear return for the trade would be 45.26%.

Big -9.20% Change: After closing the last trading session at $64.89, 51JOB opened today at $64.05 and has reached a low of $58.85.

Trade approach: A movement as big as -9.20% is a significantly bearish indicator, so this trade is designed to be profitable if JOBS maintains its current direction and does not revert back to pricing on the bullish side of $58.92 on 17-Jul-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 51JOB closes at or below $59.45 on 17-Jul-2020. Based on our risk-neutral analysis, there is a 51.70% 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.