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Quantchabot has detected a promising Bear Call Spread trade opportunity for NIO INC (NIO) for the 26-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NIO was recently trading at $46.39 and has an implied volatility of 135.01% for this period. Based on an analysis of the options available for NIO expiring on 26-Feb-2021, there is a 34.15% likelihood that the underlying will close within the analyzed range of $40.76-$46.40 at expiration. In this scenario, the average linear return for the trade would be 64.21%.
Big -8.46% Change: After closing the last trading session at $50.68, NIO INC opened today at $45.62 and has reached a low of $41.66.
Trade approach: A movement as big as -8.46% is a significantly bearish indicator, so this trade is designed to be profitable if NIO maintains its current direction and does not revert back to pricing on the bullish side of $46.39 on 26-Feb-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 NIO INC closes at or below $46.79 on 26-Feb-2021. Based on our risk-neutral analysis, there is a 52.61% 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.