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Quantchabot has detected a promising Bear Put Spread trade opportunity for DOCUSIGN INC. COMMON STOCK (DOCU) for the 5-Mar-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DOCU was recently trading at $246.38 and has an implied volatility of 51.25% for this period. Based on an analysis of the options available for DOCU expiring on 5-Mar-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $225.15-$246.39 at expiration. In this scenario, the average linear return for the trade would be 63.25%.
Big -7.08% Change: After closing the last trading session at $265.16, DOCUSIGN INC. COMMON STOCK opened today at $258.22 and has reached a low of $245.11.
Trade approach: A movement as big as -7.08% is a significantly bearish indicator, so this trade is designed to be profitable if DOCU maintains its current direction and does not revert back to pricing on the bullish side of $246.38 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 DOCUSIGN INC. COMMON STOCK closes at or below $246.45 on 5-Mar-2021. Based on our risk-neutral analysis, there is a 50.11% 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.