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Quantchabot has detected a promising Short Risk Reversal trade opportunity for SEA LTD ADS (SE) for the 25-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SE was recently trading at $184.50 and has an implied volatility of 59.58% for this period. Based on an analysis of the options available for SE expiring on 25-Feb-2022, there is a 34.13% likelihood that the underlying will close within the analyzed range of $150.30-$184.51 at expiration. In this scenario, the average linear return for the trade would be 53.87%.
Big -8.03% Change: After closing the last trading session at $200.60, SEA LTD ADS opened today at $200.49 and has reached a low of $183.43.
Trade approach: A movement as big as -8.03% is a significantly bearish indicator, so this trade is designed to be profitable if SE maintains its current direction and does not revert back to pricing on the bullish side of $184.50 on 25-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 SEA LTD ADS closes at or below $189.53 on 25-Feb-2022. Based on our risk-neutral analysis, there is a 55.21% 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.