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Quantchabot has detected a promising Bear Put Spread trade opportunity for FERRARI N V (RACE) for the 7-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
RACE was recently trading at $202.26 and has an implied volatility of 33.05% for this period. Based on an analysis of the options available for RACE expiring on 7-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $195.95-$202.26 at expiration. In this scenario, the average linear return for the trade would be 31.42%.
Big -7.21% Change: After closing the last trading session at $217.98, FERRARI N V opened today at $208.80 and has reached a low of $202.26.
Trade approach: A movement as big as -7.21% is a significantly bearish indicator, so this trade is designed to be profitable if RACE maintains its current direction and does not revert back to pricing on the bullish side of $202.26 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 FERRARI N V closes at or below $202.75 on 7-May-2021. Based on our risk-neutral analysis, there is a 53.03% 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.