Big Loser Alert: Trading today’s -7.6% move in MAGNITE INC. COMMON STOCK $MGNI

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Quantchabot has detected a promising Short Risk Reversal trade opportunity for MAGNITE INC. COMMON STOCK (MGNI) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

MGNI was recently trading at $39.54 and has an implied volatility of 92.12% for this period. Based on an analysis of the options available for MGNI expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $33.62-$39.54 at expiration. In this scenario, the average linear return for the trade would be 38.41%.

Big -7.62% Change: After closing the last trading session at $42.80, MAGNITE INC. COMMON STOCK opened today at $43.72 and has reached a low of $39.45.

Trade approach: A movement as big as -7.62% is a significantly bearish indicator, so this trade is designed to be profitable if MGNI maintains its current direction and does not revert back to pricing on the bullish side of $39.54 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 MAGNITE INC. COMMON STOCK closes at or below $40.00 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 52.83% 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.