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Quantchabot has detected a promising Short Risk Reversal trade opportunity for DADA NEXUS LIMITED (DADA) for the 15-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DADA was recently trading at $22.41 and has an implied volatility of 69.35% for this period. Based on an analysis of the options available for DADA expiring on 15-Oct-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $18.23-$22.41 at expiration. In this scenario, the average linear return for the trade would be 43.83%.
Big -13.11% Change: After closing the last trading session at $25.79, DADA NEXUS LIMITED opened today at $23.99 and has reached a low of $22.12.
Trade approach: A movement as big as -13.11% is a significantly bearish indicator, so this trade is designed to be profitable if DADA maintains its current direction and does not revert back to pricing on the bullish side of $22.41 on 15-Oct-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 DADA NEXUS LIMITED closes at or below $22.85 on 15-Oct-2021. Based on our risk-neutral analysis, there is a 53.74% 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.