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Quantchabot has detected a promising Short Risk Reversal trade opportunity for GSX TECHEDU INC (GSX) for the 30-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
GSX was recently trading at $29.42 and has an implied volatility of 158.39% for this period. Based on an analysis of the options available for GSX expiring on 30-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $19.38-$29.42 at expiration. In this scenario, the average linear return for the trade would be 84.29%.
Big -8.58% Change: After closing the last trading session at $32.18, GSX TECHEDU INC opened today at $31.95 and has reached a low of $29.16.
Trade approach: A movement as big as -8.58% is a significantly bearish indicator, so this trade is designed to be profitable if GSX maintains its current direction and does not revert back to pricing on the bullish side of $29.42 on 30-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 GSX TECHEDU INC closes at or below $30.32 on 30-Apr-2021. Based on our risk-neutral analysis, there is a 52.87% 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.