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Quantchabot has detected a promising Bear Put Spread trade opportunity for CHEWY INC (CHWY) for the 26-Mar-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CHWY was recently trading at $100.77 and has an implied volatility of 74.52% for this period. Based on an analysis of the options available for CHWY expiring on 26-Mar-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $81.02-$100.78 at expiration. In this scenario, the average linear return for the trade would be 47.58%.
Big -7.28% Change: After closing the last trading session at $108.68, CHEWY INC opened today at $103.08 and has reached a low of $95.35.
Trade approach: A movement as big as -7.28% is a significantly bearish indicator, so this trade is designed to be profitable if CHWY maintains its current direction and does not revert back to pricing on the bullish side of $100.77 on 26-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 CHEWY INC closes at or below $101.75 on 26-Mar-2021. Based on our risk-neutral analysis, there is a 51.75% 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.