Big Loser Alert: Trading today’s -7.4% move in XPENG INC $XPEV

Quantchabot has detected a promising Bear Call Spread trade opportunity for XPENG INC (XPEV) for the 25-Nov-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

XPEV was recently trading at $7.19 and has an implied volatility of 104.88% for this period. Based on an analysis of the options available for XPEV expiring on 25-Nov-2022, there is a 34.69% likelihood that the underlying will close within the analyzed range of $6.38-$7.19 at expiration. In this scenario, the average linear return for the trade would be 31.58%.

Big -7.38% Change: After closing the last trading session at $7.76, XPENG INC opened today at $7.54 and has reached a low of $7.10.

Trade approach: A movement as big as -7.38% 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 $7.19 on 25-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 XPENG INC closes at or below $7.22 on 25-Nov-2022. Based on our risk-neutral analysis, there is a 51.39% 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.