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Quantchabot has detected a promising Bear Put Spread trade opportunity for SHOPIFY INC (SHOP) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SHOP was recently trading at $1,279.10 and has an implied volatility of 53.56% for this period. Based on an analysis of the options available for SHOP expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $1,044.43-$1,279.31 at expiration. In this scenario, the average linear return for the trade would be 66.74%.
Big -7.40% Change: After closing the last trading session at $1,381.30, SHOPIFY INC opened today at $1,269.78 and has reached a low of $1,205.44.
Trade approach: A movement as big as -7.40% is a significantly bearish indicator, so this trade is designed to be profitable if SHOP maintains its current direction and does not revert back to pricing on the bullish side of $1,279.10 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 SHOPIFY INC closes at or below $1,280.40 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 50.17% 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.