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Quantchabot has detected a promising Bear Call Spread trade opportunity for STITCH FIX INC. CLASS A COMMON STOCK (SFIX) for the 5-Mar-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SFIX was recently trading at $78.35 and has an implied volatility of 77.30% for this period. Based on an analysis of the options available for SFIX expiring on 5-Mar-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $66.53-$78.35 at expiration. In this scenario, the average linear return for the trade would be 41.61%.
Big -7.17% Change: After closing the last trading session at $84.40, STITCH FIX INC. CLASS A COMMON STOCK opened today at $82.20 and has reached a low of $75.51.
Trade approach: A movement as big as -7.17% is a significantly bearish indicator, so this trade is designed to be profitable if SFIX maintains its current direction and does not revert back to pricing on the bullish side of $78.35 on 5-Mar-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 STITCH FIX INC. CLASS A COMMON STOCK closes at or below $78.42 on 5-Mar-2021. Based on our risk-neutral analysis, there is a 50.21% 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.