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Quantchabot has detected a promising Short Risk Reversal trade opportunity for PACIFIC BIOSCIENCES (PACB) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PACB was recently trading at $27.63 and has an implied volatility of 79.94% for this period. Based on an analysis of the options available for PACB expiring on 18-Jun-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $20.78-$27.63 at expiration. In this scenario, the average linear return for the trade would be 52.75%.
Big -7.44% Change: After closing the last trading session at $29.85, PACIFIC BIOSCIENCES opened today at $29.50 and has reached a low of $27.58.
Trade approach: A movement as big as -7.44% is a significantly bearish indicator, so this trade is designed to be profitable if PACB maintains its current direction and does not revert back to pricing on the bullish side of $27.63 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 PACIFIC BIOSCIENCES closes at or below $27.85 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 51.09% 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.