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Quantchabot has detected a promising Short Risk Reversal trade opportunity for KINGSOFT CLOUD HOLDINGS LIMITED AMERICAN DEPOSITAR (KC) for the 15-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
KC was recently trading at $29.59 and has an implied volatility of 63.19% for this period. Based on an analysis of the options available for KC expiring on 15-Oct-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $24.66-$29.59 at expiration. In this scenario, the average linear return for the trade would be 39.21%.
Big -7.07% Change: After closing the last trading session at $31.84, KINGSOFT CLOUD HOLDINGS LIMITED AMERICAN DEPOSITAR opened today at $31.39 and has reached a low of $29.20.
Trade approach: A movement as big as -7.07% is a significantly bearish indicator, so this trade is designed to be profitable if KC maintains its current direction and does not revert back to pricing on the bullish side of $29.59 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 KINGSOFT CLOUD HOLDINGS LIMITED AMERICAN DEPOSITAR closes at or below $29.70 on 15-Oct-2021. Based on our risk-neutral analysis, there is a 50.80% 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.