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Quantchabot has detected a promising Bear Put Spread trade opportunity for REVOLVE GROUP INC (RVLV) for the 25-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
RVLV was recently trading at $46.63 and has an implied volatility of 72.95% for this period. Based on an analysis of the options available for RVLV expiring on 25-Feb-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $36.38-$46.64 at expiration. In this scenario, the average linear return for the trade would be 28.57%.
Big -9.97% Change: After closing the last trading session at $51.80, REVOLVE GROUP INC opened today at $50.82 and has reached a low of $46.16.
Trade approach: A movement as big as -9.97% is a significantly bearish indicator, so this trade is designed to be profitable if RVLV maintains its current direction and does not revert back to pricing on the bullish side of $46.63 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 REVOLVE GROUP INC closes at or below $47.10 on 25-Feb-2022. Based on our risk-neutral analysis, there is a 51.58% 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.