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Quantchabot has detected a promising Long 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 $21.14 and has an implied volatility of 69.80% 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 $21.14-$25.85 at expiration. In this scenario, the average linear return for the trade would be 48.71%.
Big 8.35% Change: After closing the last trading session at $19.51, DADA NEXUS LIMITED opened today at $19.41 and has reached a high of $21.29.
Trade approach: A movement as big as 8.35% is a significantly bullish indicator, so this trade is designed to be profitable if DADA maintains its current direction and does not revert back to pricing on the bearish side of $21.14 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 bullish strategy, the trade would be profitable if DADA NEXUS LIMITED closes at or above $21.00 on 15-Oct-2021. Based on our risk-neutral analysis, there is a 51.33% 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.