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Quantchabot has detected a promising Bear Call Spread trade opportunity for VIRGIN GALACTIC HOLDINGS INC (SPCE) for the 7-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SPCE was recently trading at $20.54 and has an implied volatility of 84.92% for this period. Based on an analysis of the options available for SPCE expiring on 7-May-2021, there is a 34.15% likelihood that the underlying will close within the analyzed range of $18.71-$20.54 at expiration. In this scenario, the average linear return for the trade would be 48.05%.
Big -7.29% Change: After closing the last trading session at $22.15, VIRGIN GALACTIC HOLDINGS INC opened today at $21.72 and has reached a low of $20.47.
Trade approach: A movement as big as -7.29% is a significantly bearish indicator, so this trade is designed to be profitable if SPCE maintains its current direction and does not revert back to pricing on the bullish side of $20.54 on 7-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 VIRGIN GALACTIC HOLDINGS INC closes at or below $20.71 on 7-May-2021. Based on our risk-neutral analysis, there is a 53.64% 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.