Quantchabot has detected a promising Covered Put trade opportunity for ZAI LAB LIMITED ADS (ZLAB) for the 21-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ZLAB was recently trading at $44.88 and has an implied volatility of 103.61% for this period. Based on an analysis of the options available for ZLAB expiring on 21-Oct-2022, there is a 34.20% likelihood that the underlying will close within the analyzed range of $33.31-$44.98 at expiration. In this scenario, the average linear return for the trade would be 19.22%.
Big -8.62% Change: After closing the last trading session at $49.12, ZAI LAB LIMITED ADS opened today at $49.26 and has reached a low of $44.87.
Trade approach: A movement as big as -8.62% is a significantly bearish indicator, so this trade is designed to be profitable if ZLAB maintains its current direction and does not revert back to pricing on the bullish side of $44.88 on 21-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 ZAI LAB LIMITED ADS closes at or below $48.60 on 21-Oct-2022. Based on our risk-neutral analysis, there is a 60.19% 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.