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Quantchabot has detected a promising Bear Put Spread trade opportunity for SPOTIFY TECHNOLOGY SA (SPOT) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SPOT was recently trading at $322.44 and has an implied volatility of 53.38% for this period. Based on an analysis of the options available for SPOT expiring on 16-Apr-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $263.52-$322.49 at expiration. In this scenario, the average linear return for the trade would be 56.00%.
Big -7.85% Change: After closing the last trading session at $349.91, SPOTIFY TECHNOLOGY SA opened today at $332.57 and has reached a low of $310.34.
Trade approach: A movement as big as -7.85% is a significantly bearish indicator, so this trade is designed to be profitable if SPOT maintains its current direction and does not revert back to pricing on the bullish side of $322.44 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 SPOTIFY TECHNOLOGY SA closes at or below $325.30 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 51.71% 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.