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Quantchabot has detected a promising Bear Put Spread trade opportunity for FARFETCH LTD (FTCH) for the 21-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
FTCH was recently trading at $35.52 and has an implied volatility of 54.11% for this period. Based on an analysis of the options available for FTCH expiring on 21-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $28.51-$35.52 at expiration. In this scenario, the average linear return for the trade would be 59.86%.
Big -9.54% Change: After closing the last trading session at $39.26, FARFETCH LTD opened today at $39.31 and has reached a low of $35.45.
Trade approach: A movement as big as -9.54% is a significantly bearish indicator, so this trade is designed to be profitable if FTCH maintains its current direction and does not revert back to pricing on the bullish side of $35.52 on 21-Jan-2022. 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 FARFETCH LTD closes at or below $35.76 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 51.22% 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.