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Quantchabot has detected a promising Bear Call Spread trade opportunity for DUOLINGO INC. CLASS A COMMON STOCK (DUOL) for the 21-Jan-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DUOL was recently trading at $94.39 and has an implied volatility of 73.17% for this period. Based on an analysis of the options available for DUOL expiring on 21-Jan-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $84.54-$94.40 at expiration. In this scenario, the average linear return for the trade would be 41.12%.
Big -8.37% Change: After closing the last trading session at $103.02, DUOLINGO INC. CLASS A COMMON STOCK opened today at $101.21 and has reached a low of $92.67.
Trade approach: A movement as big as -8.37% is a significantly bearish indicator, so this trade is designed to be profitable if DUOL maintains its current direction and does not revert back to pricing on the bullish side of $94.39 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 DUOLINGO INC. CLASS A COMMON STOCK closes at or below $95.15 on 21-Jan-2022. Based on our risk-neutral analysis, there is a 52.88% 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.