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Quantchabot has detected a promising Short Risk Reversal trade opportunity for FUTU HOLDINGS LTD ADS (FUTU) for the 29-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
FUTU was recently trading at $101.66 and has an implied volatility of 71.42% for this period. Based on an analysis of the options available for FUTU expiring on 29-Oct-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $78.81-$101.67 at expiration. In this scenario, the average linear return for the trade would be 54.30%.
Big -7.58% Change: After closing the last trading session at $109.99, FUTU HOLDINGS LTD ADS opened today at $108.17 and has reached a low of $101.21.
Trade approach: A movement as big as -7.58% is a significantly bearish indicator, so this trade is designed to be profitable if FUTU maintains its current direction and does not revert back to pricing on the bullish side of $101.66 on 29-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 FUTU HOLDINGS LTD ADS closes at or below $103.25 on 29-Oct-2021. Based on our risk-neutral analysis, there is a 52.42% 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.