Quantchabot has detected a promising Bear Call Spread trade opportunity for AVADEL PHARMACEUTICALS PLC ADR (AVDL) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AVDL was recently trading at $7.62 and has an implied volatility of 106.33% for this period. Based on an analysis of the options available for AVDL expiring on 20-Jan-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $4.99-$7.67 at expiration. In this scenario, the average linear return for the trade would be 27.99%.
Big -7.36% Change: After closing the last trading session at $8.22, AVADEL PHARMACEUTICALS PLC ADR opened today at $8.31 and has reached a low of $7.53.
Trade approach: A movement as big as -7.36% is a significantly bearish indicator, so this trade is designed to be profitable if AVDL maintains its current direction and does not revert back to pricing on the bullish side of $7.62 on 20-Jan-2023. 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 AVADEL PHARMACEUTICALS PLC ADR closes at or below $8.05 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 54.54% 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.