Quantchabot has detected a promising Covered Put trade opportunity for DADA NEXUS LIMITED (DADA) for the 18-Nov-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DADA was recently trading at $4.95 and has an implied volatility of 81.98% for this period. Based on an analysis of the options available for DADA expiring on 18-Nov-2022, there is a 34.17% likelihood that the underlying will close within the analyzed range of $3.58-$4.97 at expiration. In this scenario, the average linear return for the trade would be 25.31%.
Big -7.46% Change: After closing the last trading session at $5.35, DADA NEXUS LIMITED opened today at $5.29 and has reached a low of $4.93.
Trade approach: A movement as big as -7.46% is a significantly bearish indicator, so this trade is designed to be profitable if DADA maintains its current direction and does not revert back to pricing on the bullish side of $4.95 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 DADA NEXUS LIMITED closes at or below $5.49 on 18-Nov-2022. Based on our risk-neutral analysis, there is a 61.88% 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.