Big Loser Alert: Trading today’s -9.5% move in LUFAX HOLDING LTD $LU

Quantchabot has detected a promising Bear Call Spread trade opportunity for LUFAX HOLDING LTD (LU) for the 15-Jul-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

LU was recently trading at $6.17 and has an implied volatility of 63.87% for this period. Based on an analysis of the options available for LU expiring on 15-Jul-2022, there is a 34.22% likelihood that the underlying will close within the analyzed range of $5.25-$6.17 at expiration. In this scenario, the average linear return for the trade would be 22.85%.

Big -9.53% Change: After closing the last trading session at $6.82, LUFAX HOLDING LTD opened today at $6.25 and has reached a low of $5.97.

Trade approach: A movement as big as -9.53% is a significantly bearish indicator, so this trade is designed to be profitable if LU maintains its current direction and does not revert back to pricing on the bullish side of $6.17 on 15-Jul-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 LUFAX HOLDING LTD closes at or below $6.20 on 15-Jul-2022. Based on our risk-neutral analysis, there is a 51.02% 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.