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Quantchabot has detected a promising Short Risk Reversal trade opportunity for PELOTON INTERACTIVE INC. CLASS A COMMON STOCK (PTON) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PTON was recently trading at $129.34 and has an implied volatility of 67.22% for this period. Based on an analysis of the options available for PTON expiring on 16-Apr-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $100.06-$129.36 at expiration. In this scenario, the average linear return for the trade would be 67.75%.
Big -7.43% Change: After closing the last trading session at $139.71, PELOTON INTERACTIVE INC. CLASS A COMMON STOCK opened today at $137.32 and has reached a low of $128.73.
Trade approach: A movement as big as -7.43% is a significantly bearish indicator, so this trade is designed to be profitable if PTON maintains its current direction and does not revert back to pricing on the bullish side of $129.34 on 16-Apr-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 PELOTON INTERACTIVE INC. CLASS A COMMON STOCK closes at or below $134.28 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 55.78% 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.