Big Loser Alert: Trading today’s -7.4% move in WAYFAIR INC $W

Quantchabot has detected a promising Bear Call Spread trade opportunity for WAYFAIR INC (W) for the 28-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

W was recently trading at $39.19 and has an implied volatility of 95.04% for this period. Based on an analysis of the options available for W expiring on 28-Oct-2022, there is a 34.19% likelihood that the underlying will close within the analyzed range of $29.07-$39.29 at expiration. In this scenario, the average linear return for the trade would be 31.75%.

Big -7.40% Change: After closing the last trading session at $42.32, WAYFAIR INC opened today at $42.00 and has reached a low of $39.12.

Trade approach: A movement as big as -7.40% is a significantly bearish indicator, so this trade is designed to be profitable if W maintains its current direction and does not revert back to pricing on the bullish side of $39.19 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 WAYFAIR INC closes at or below $39.35 on 28-Oct-2022. Based on our risk-neutral analysis, there is a 50.19% 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.