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Quantchabot has detected a promising Short Risk Reversal trade opportunity for C3.AI INC (AI) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AI was recently trading at $63.37 and has an implied volatility of 75.82% for this period. Based on an analysis of the options available for AI expiring on 21-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $48.67-$63.38 at expiration. In this scenario, the average linear return for the trade would be 63.16%.
Big -7.88% Change: After closing the last trading session at $68.79, C3.AI INC opened today at $68.19 and has reached a low of $63.27.
Trade approach: A movement as big as -7.88% is a significantly bearish indicator, so this trade is designed to be profitable if AI maintains its current direction and does not revert back to pricing on the bullish side of $63.37 on 21-May-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 C3.AI INC closes at or below $65.60 on 21-May-2021. Based on our risk-neutral analysis, there is a 55.19% 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.