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Quantchabot has detected a promising Bear Call Spread trade opportunity for CHEWY INC (CHWY) for the 3-Dec-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CHWY was recently trading at $67.70 and has an implied volatility of 54.62% for this period. Based on an analysis of the options available for CHWY expiring on 3-Dec-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $61.49-$67.70 at expiration. In this scenario, the average linear return for the trade would be 57.22%.
Big -7.16% Change: After closing the last trading session at $72.92, CHEWY INC opened today at $72.50 and has reached a low of $67.42.
Trade approach: A movement as big as -7.16% is a significantly bearish indicator, so this trade is designed to be profitable if CHWY maintains its current direction and does not revert back to pricing on the bullish side of $67.70 on 3-Dec-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 CHEWY INC closes at or below $67.98 on 3-Dec-2021. Based on our risk-neutral analysis, there is a 51.70% 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.