Quantchabot has detected a promising Bear Call Spread trade opportunity for LI AUTO INC (LI) for the 18-Nov-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LI was recently trading at $23.55 and has an implied volatility of 67.71% for this period. Based on an analysis of the options available for LI expiring on 18-Nov-2022, there is a 34.17% likelihood that the underlying will close within the analyzed range of $18.03-$23.65 at expiration. In this scenario, the average linear return for the trade would be 24.61%.
Big -7.04% Change: After closing the last trading session at $25.34, LI AUTO INC opened today at $24.32 and has reached a low of $23.47.
Trade approach: A movement as big as -7.04% is a significantly bearish indicator, so this trade is designed to be profitable if LI maintains its current direction and does not revert back to pricing on the bullish side of $23.55 on 18-Nov-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 LI AUTO INC closes at or below $23.70 on 18-Nov-2022. Based on our risk-neutral analysis, there is a 50.29% 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.