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Quantchabot has detected a promising Bear Call Spread trade opportunity for UNITY SOFTWARE INC (U) for the 28-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
U was recently trading at $118.37 and has an implied volatility of 60.14% for this period. Based on an analysis of the options available for U expiring on 28-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $104.69-$118.37 at expiration. In this scenario, the average linear return for the trade would be 53.72%.
Big -8.35% Change: After closing the last trading session at $129.15, UNITY SOFTWARE INC opened today at $127.31 and has reached a low of $118.30.
Trade approach: A movement as big as -8.35% is a significantly bearish indicator, so this trade is designed to be profitable if U maintains its current direction and does not revert back to pricing on the bullish side of $118.37 on 28-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 UNITY SOFTWARE INC closes at or below $119.50 on 28-Jan-2022. Based on our risk-neutral analysis, there is a 53.08% 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.