Big Loser Alert: Trading today’s -14.8% move in HERBALIFE $HLF

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Quantchabot has detected a promising Bear Call Spread trade opportunity for HERBALIFE (HLF) for the 29-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

HLF was recently trading at $46.21 and has an implied volatility of 37.57% for this period. Based on an analysis of the options available for HLF expiring on 29-Oct-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $40.48-$46.21 at expiration. In this scenario, the average linear return for the trade would be 28.89%.

Big -14.80% Change: After closing the last trading session at $54.24, HERBALIFE opened today at $48.10 and has reached a low of $45.85.

Trade approach: A movement as big as -14.80% is a significantly bearish indicator, so this trade is designed to be profitable if HLF maintains its current direction and does not revert back to pricing on the bullish side of $46.21 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 HERBALIFE closes at or below $46.45 on 29-Oct-2021. Based on our risk-neutral analysis, there is a 51.53% 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.