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Quantchabot has detected a promising Short Risk Reversal trade opportunity for US SILICA HOLDINGS (SLCA) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SLCA was recently trading at $9.72 and has an implied volatility of 75.48% for this period. Based on an analysis of the options available for SLCA expiring on 18-Jun-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $7.43-$9.73 at expiration. In this scenario, the average linear return for the trade would be 52.08%.
Big -8.69% Change: After closing the last trading session at $10.65, US SILICA HOLDINGS opened today at $10.88 and has reached a low of $9.45.
Trade approach: A movement as big as -8.69% is a significantly bearish indicator, so this trade is designed to be profitable if SLCA maintains its current direction and does not revert back to pricing on the bullish side of $9.72 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 US SILICA HOLDINGS closes at or below $9.80 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 51.12% 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.