Big Loser Alert: Trading today’s -8.6% move in DISCOVERY COMMUNICATIONS $DISCA

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Quantchabot has detected a promising Bear Call Spread trade opportunity for DISCOVERY COMMUNICATIONS (DISCA) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

DISCA was recently trading at $50.56 and has an implied volatility of 50.21% for this period. Based on an analysis of the options available for DISCA expiring on 16-Apr-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $41.82-$50.57 at expiration. In this scenario, the average linear return for the trade would be 46.30%.

Big -8.55% Change: After closing the last trading session at $55.29, DISCOVERY COMMUNICATIONS opened today at $53.82 and has reached a low of $50.33.

Trade approach: A movement as big as -8.55% is a significantly bearish indicator, so this trade is designed to be profitable if DISCA maintains its current direction and does not revert back to pricing on the bullish side of $50.56 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 DISCOVERY COMMUNICATIONS closes at or below $51.05 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 51.99% 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.