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Quantchabot has detected a promising Short Risk Reversal trade opportunity for SMART GLOBAL HOLDINGS INC. ORDINARY SHARES (SGH) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SGH was recently trading at $48.53 and has an implied volatility of 46.71% for this period. Based on an analysis of the options available for SGH expiring on 18-Jun-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $40.67-$48.54 at expiration. In this scenario, the average linear return for the trade would be 31.97%.
Big -8.19% Change: After closing the last trading session at $52.86, SMART GLOBAL HOLDINGS INC. ORDINARY SHARES opened today at $52.51 and has reached a low of $46.60.
Trade approach: A movement as big as -8.19% is a significantly bearish indicator, so this trade is designed to be profitable if SGH maintains its current direction and does not revert back to pricing on the bullish side of $48.53 on 18-Jun-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 SMART GLOBAL HOLDINGS INC. ORDINARY SHARES closes at or below $49.15 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 52.82% 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.