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Quantchabot has detected a promising Bear Call Spread trade opportunity for VIPSHOP HOLDINGS (VIPS) for the 29-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
VIPS was recently trading at $13.15 and has an implied volatility of 63.94% for this period. Based on an analysis of the options available for VIPS expiring on 29-Oct-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $10.52-$13.15 at expiration. In this scenario, the average linear return for the trade would be 53.02%.
52 week low: VIPSHOP HOLDINGS recently reached a new 52-week low at $12.98. VIPS had traded in the range $13.02-$46.00 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if VIPS maintains its current direction and does not revert back to pricing on the bullish side of $13.15 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 VIPSHOP HOLDINGS closes at or below $13.35 on 29-Oct-2021. Based on our risk-neutral analysis, there is a 52.68% 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.