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Quantchabot has detected a promising Short Risk Reversal trade opportunity for NORDSTROM (JWN) for the 21-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
JWN was recently trading at $22.73 and has an implied volatility of 60.82% for this period. Based on an analysis of the options available for JWN expiring on 21-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $17.83-$22.73 at expiration. In this scenario, the average linear return for the trade would be 62.51%.
Big -28.82% Change: After closing the last trading session at $31.93, NORDSTROM opened today at $24.05 and has reached a low of $22.50.
Trade approach: A movement as big as -28.82% is a significantly bearish indicator, so this trade is designed to be profitable if JWN maintains its current direction and does not revert back to pricing on the bullish side of $22.73 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 NORDSTROM closes at or below $23.69 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 56.75% 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.