Quantchabot has detected a promising Bear Call Spread trade opportunity for TENCENT MUSIC ENTERTAINMENT GROUP (TME) for the 28-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TME was recently trading at $4.24 and has an implied volatility of 62.69% for this period. Based on an analysis of the options available for TME expiring on 28-Oct-2022, there is a 34.19% likelihood that the underlying will close within the analyzed range of $3.47-$4.25 at expiration. In this scenario, the average linear return for the trade would be 40.85%.
Big -7.53% Change: After closing the last trading session at $4.58, TENCENT MUSIC ENTERTAINMENT GROUP opened today at $4.51 and has reached a low of $4.23.
Trade approach: A movement as big as -7.53% is a significantly bearish indicator, so this trade is designed to be profitable if TME maintains its current direction and does not revert back to pricing on the bullish side of $4.24 on 28-Oct-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 TENCENT MUSIC ENTERTAINMENT GROUP closes at or below $4.32 on 28-Oct-2022. Based on our risk-neutral analysis, there is a 53.41% 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.