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Quantchabot has detected a promising Covered Put trade opportunity for AGORA INC. AMERICAN DEPOSITARY SHARES (API) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
API was recently trading at $71.31 and has an implied volatility of 104.51% for this period. Based on an analysis of the options available for API expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $48.01-$71.32 at expiration. In this scenario, the average linear return for the trade would be 127.17%.
Big -9.68% Change: After closing the last trading session at $78.95, AGORA INC. AMERICAN DEPOSITARY SHARES opened today at $68.01 and has reached a low of $63.64.
Trade approach: A movement as big as -9.68% is a significantly bearish indicator, so this trade is designed to be profitable if API maintains its current direction and does not revert back to pricing on the bullish side of $71.31 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 AGORA INC. AMERICAN DEPOSITARY SHARES closes at or below $106.10 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 84.23% 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.