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Quantchabot has detected a promising Bear Call Spread trade opportunity for TWITTER INC (TWTR) for the 5-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TWTR was recently trading at $47.85 and has an implied volatility of 61.18% for this period. Based on an analysis of the options available for TWTR expiring on 5-Feb-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $40.73-$47.85 at expiration. In this scenario, the average linear return for the trade would be 68.02%.
Big -7.05% Change: After closing the last trading session at $51.48, TWITTER INC opened today at $47.09 and has reached a low of $45.15.
Trade approach: A movement as big as -7.05% is a significantly bearish indicator, so this trade is designed to be profitable if TWTR maintains its current direction and does not revert back to pricing on the bullish side of $47.85 on 5-Feb-2021. 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 TWITTER INC closes at or below $48.25 on 5-Feb-2021. Based on our risk-neutral analysis, there is a 52.04% 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.