Quantchabot has detected a promising Bear Call Spread trade opportunity for WEIBO CORPORATION AMERICAN DEP (WB) for the 5-Aug-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
WB was recently trading at $18.09 and has an implied volatility of 58.98% for this period. Based on an analysis of the options available for WB expiring on 5-Aug-2022, there is a 34.59% likelihood that the underlying will close within the analyzed range of $16.92-$18.10 at expiration. In this scenario, the average linear return for the trade would be 24.52%.
52 week low: WEIBO CORPORATION AMERICAN DEP recently reached a new 52-week low at $18.01. WB had traded in the range $18.56-$58.24 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if WB maintains its current direction and does not revert back to pricing on the bullish side of $18.09 on 5-Aug-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 WEIBO CORPORATION AMERICAN DEP closes at or below $18.20 on 5-Aug-2022. Based on our risk-neutral analysis, there is a 53.50% 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.