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Quantchabot has detected a promising Short Risk Reversal trade opportunity for SUNNOVA ENERGY INTERNATIONAL INC (NOVA) for the 16-Jul-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NOVA was recently trading at $26.54 and has an implied volatility of 81.06% for this period. Based on an analysis of the options available for NOVA expiring on 16-Jul-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $19.09-$26.54 at expiration. In this scenario, the average linear return for the trade would be 66.97%.
Big -7.69% Change: After closing the last trading session at $28.75, SUNNOVA ENERGY INTERNATIONAL INC opened today at $25.71 and has reached a low of $24.63.
Trade approach: A movement as big as -7.69% is a significantly bearish indicator, so this trade is designed to be profitable if NOVA maintains its current direction and does not revert back to pricing on the bullish side of $26.54 on 16-Jul-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 SUNNOVA ENERGY INTERNATIONAL INC closes at or below $27.50 on 16-Jul-2021. Based on our risk-neutral analysis, there is a 54.27% 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.