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Quantchabot has detected a promising Short Risk Reversal trade opportunity for LIVENT CORP (LTHM) for the 16-Jul-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LTHM was recently trading at $18.79 and has an implied volatility of 59.92% for this period. Based on an analysis of the options available for LTHM expiring on 16-Jul-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $15.56-$18.79 at expiration. In this scenario, the average linear return for the trade would be 43.23%.
Big -8.30% Change: After closing the last trading session at $20.49, LIVENT CORP opened today at $19.61 and has reached a low of $18.77.
Trade approach: A movement as big as -8.30% is a significantly bearish indicator, so this trade is designed to be profitable if LTHM maintains its current direction and does not revert back to pricing on the bullish side of $18.79 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 LIVENT CORP closes at or below $19.45 on 16-Jul-2021. Based on our risk-neutral analysis, there is a 57.24% 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.