Quantcha now offering unlimited commission-free options trading.
Quantchabot has detected a promising Short Risk Reversal trade opportunity for ATEA PHARMACEUTICALS INC. COMMON STOCK (AVIR) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AVIR was recently trading at $27.89 and has an implied volatility of 170.55% for this period. Based on an analysis of the options available for AVIR expiring on 21-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $18.12-$27.89 at expiration. In this scenario, the average linear return for the trade would be 43.57%.
Big -16.99% Change: After closing the last trading session at $33.60, ATEA PHARMACEUTICALS INC. COMMON STOCK opened today at $32.41 and has reached a low of $27.56.
Trade approach: A movement as big as -16.99% is a significantly bearish indicator, so this trade is designed to be profitable if AVIR maintains its current direction and does not revert back to pricing on the bullish side of $27.89 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 ATEA PHARMACEUTICALS INC. COMMON STOCK closes at or below $28.60 on 21-May-2021. Based on our risk-neutral analysis, there is a 52.32% 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.