Quantchabot has detected a promising Bear Call Spread trade opportunity for XPENG INC (XPEV) for the 28-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
XPEV was recently trading at $14.45 and has an implied volatility of 80.94% for this period. Based on an analysis of the options available for XPEV expiring on 28-Oct-2022, there is a 34.19% likelihood that the underlying will close within the analyzed range of $11.17-$14.49 at expiration. In this scenario, the average linear return for the trade would be 27.54%.
Big -9.29% Change: After closing the last trading session at $15.93, XPENG INC opened today at $15.46 and has reached a low of $14.30.
Trade approach: A movement as big as -9.29% is a significantly bearish indicator, so this trade is designed to be profitable if XPEV maintains its current direction and does not revert back to pricing on the bullish side of $14.45 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 XPENG INC closes at or below $14.50 on 28-Oct-2022. Based on our risk-neutral analysis, there is a 50.12% 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.