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Quantchabot has detected a promising Short Risk Reversal trade opportunity for KANZHUN LIMITED AMERICAN DEPOSITORY SHAR (BZ) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BZ was recently trading at $33.26 and has an implied volatility of 74.82% for this period. Based on an analysis of the options available for BZ expiring on 18-Feb-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $26.02-$33.26 at expiration. In this scenario, the average linear return for the trade would be 51.25%.
Big -9.91% Change: After closing the last trading session at $36.92, KANZHUN LIMITED AMERICAN DEPOSITORY SHAR opened today at $36.83 and has reached a low of $32.80.
Trade approach: A movement as big as -9.91% is a significantly bearish indicator, so this trade is designed to be profitable if BZ maintains its current direction and does not revert back to pricing on the bullish side of $33.26 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 KANZHUN LIMITED AMERICAN DEPOSITORY SHAR closes at or below $34.40 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 55.45% 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.