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Quantchabot has detected a promising Covered Put trade opportunity for QUANTUMSCAPE CORP (QS) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
QS was recently trading at $59.21 and has an implied volatility of 130.52% for this period. Based on an analysis of the options available for QS expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $36.13-$59.22 at expiration. In this scenario, the average linear return for the trade would be 171.53%.
Big -8.57% Change: After closing the last trading session at $64.76, QUANTUMSCAPE CORP opened today at $60.97 and has reached a low of $50.77.
Trade approach: A movement as big as -8.57% is a significantly bearish indicator, so this trade is designed to be profitable if QS maintains its current direction and does not revert back to pricing on the bullish side of $59.21 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 QUANTUMSCAPE CORP closes at or below $87.41 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 78.46% 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.