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Quantchabot has detected a promising Short Risk Reversal trade opportunity for ENPHASE ENERGY (ENPH) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ENPH was recently trading at $173.07 and has an implied volatility of 76.14% for this period. Based on an analysis of the options available for ENPH expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $129.39-$173.10 at expiration. In this scenario, the average linear return for the trade would be 67.82%.
Big -8.79% Change: After closing the last trading session at $189.74, ENPHASE ENERGY opened today at $182.81 and has reached a low of $172.71.
Trade approach: A movement as big as -8.79% is a significantly bearish indicator, so this trade is designed to be profitable if ENPH maintains its current direction and does not revert back to pricing on the bullish side of $173.07 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 ENPHASE ENERGY closes at or below $179.02 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 54.60% 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.