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Quantchabot has detected a promising Bear Call Spread trade opportunity for TENCENT MUSIC ENTERTAINMENT GROUP (TME) for the 19-Mar-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TME was recently trading at $24.93 and has an implied volatility of 58.46% for this period. Based on an analysis of the options available for TME expiring on 19-Mar-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $21.38-$24.94 at expiration. In this scenario, the average linear return for the trade would be 51.52%.
Big -7.10% Change: After closing the last trading session at $26.84, TENCENT MUSIC ENTERTAINMENT GROUP opened today at $26.02 and has reached a low of $24.78.
Trade approach: A movement as big as -7.10% is a significantly bearish indicator, so this trade is designed to be profitable if TME maintains its current direction and does not revert back to pricing on the bullish side of $24.93 on 19-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 TENCENT MUSIC ENTERTAINMENT GROUP closes at or below $25.34 on 19-Mar-2021. Based on our risk-neutral analysis, there is a 54.15% 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.