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Quantchabot has detected a promising Bear Put Spread trade opportunity for ZOOM VIDEO COMMUNICATIONS INC. CLASS A COMMON STO (ZM) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ZM was recently trading at $205.42 and has an implied volatility of 49.68% for this period. Based on an analysis of the options available for ZM expiring on 18-Feb-2022, there is a 34.13% likelihood that the underlying will close within the analyzed range of $161.14-$205.47 at expiration. In this scenario, the average linear return for the trade would be 72.68%.
52 week low: ZOOM VIDEO COMMUNICATIONS INC. CLASS A COMMON STO recently reached a new 52-week low at $203.38. ZM had traded in the range $245.16-$486.83 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if ZM maintains its current direction and does not revert back to pricing on the bullish side of $205.42 on 18-Feb-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 ZOOM VIDEO COMMUNICATIONS INC. CLASS A COMMON STO closes at or below $206.30 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 50.66% 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.