Big Loser Alert: Trading today’s -9.5% move in ELASTIC NV $ESTC

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Quantchabot has detected a promising Bear Call Spread trade opportunity for ELASTIC NV (ESTC) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

ESTC was recently trading at $100.50 and has an implied volatility of 57.38% for this period. Based on an analysis of the options available for ESTC expiring on 18-Feb-2022, there is a 34.13% likelihood that the underlying will close within the analyzed range of $83.87-$100.50 at expiration. In this scenario, the average linear return for the trade would be 59.61%.

Big -9.50% Change: After closing the last trading session at $111.04, ELASTIC NV opened today at $101.83 and has reached a low of $98.19.

Trade approach: A movement as big as -9.50% is a significantly bearish indicator, so this trade is designed to be profitable if ESTC maintains its current direction and does not revert back to pricing on the bullish side of $100.50 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 ELASTIC NV closes at or below $101.20 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 51.53% 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.