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Quantchabot has detected a promising Covered Put trade opportunity for DENALI THERAPEUTICS INC. COMMON STOCK (DNLI) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DNLI was recently trading at $33.52 and has an implied volatility of 68.58% for this period. Based on an analysis of the options available for DNLI expiring on 18-Feb-2022, there is a 34.13% likelihood that the underlying will close within the analyzed range of $27.00-$33.53 at expiration. In this scenario, the average linear return for the trade would be 17.70%.
Big -13.04% Change: After closing the last trading session at $38.55, DENALI THERAPEUTICS INC. COMMON STOCK opened today at $30.89 and has reached a low of $30.25.
Trade approach: A movement as big as -13.04% is a significantly bearish indicator, so this trade is designed to be profitable if DNLI maintains its current direction and does not revert back to pricing on the bullish side of $33.52 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 DENALI THERAPEUTICS INC. COMMON STOCK closes at or below $33.90 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 52.04% 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.