Big Loser Alert: Trading today’s -12.7% move in MELCO RESORTS & ENTERTAINMENT LTD $MLCO

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Quantchabot has detected a promising Bear Call Spread trade opportunity for MELCO RESORTS & ENTERTAINMENT LTD (MLCO) for the 15-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

MLCO was recently trading at $10.43 and has an implied volatility of 60.84% for this period. Based on an analysis of the options available for MLCO expiring on 15-Oct-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $8.75-$10.43 at expiration. In this scenario, the average linear return for the trade would be 38.46%.

Big -12.72% Change: After closing the last trading session at $11.95, MELCO RESORTS & ENTERTAINMENT LTD opened today at $10.74 and has reached a low of $10.38.

Trade approach: A movement as big as -12.72% is a significantly bearish indicator, so this trade is designed to be profitable if MLCO maintains its current direction and does not revert back to pricing on the bullish side of $10.43 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 MELCO RESORTS & ENTERTAINMENT LTD closes at or below $10.60 on 15-Oct-2021. Based on our risk-neutral analysis, there is a 53.65% 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.