Quantchabot has detected a promising Short Risk Reversal trade opportunity for CHICO’S FAS (CHS) for the 19-May-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CHS was recently trading at $7.11 and has an implied volatility of 63.77% for this period. Based on an analysis of the options available for CHS expiring on 19-May-2023, there is a 32.17% likelihood that the underlying will close within the analyzed range of $4.65-$7.11 at expiration. In this scenario, the average linear return for the trade would be 67.83%.
Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, CHICO’S FAS was recently trending, indicating that breaking news and/or market activity has significantly impacted sentiment toward the stock. This movement can be interpretted as a sign of more near-term price movement for the underlying.
Trade approach: The recent sentiment change in CHS on StockTwits appears to be significantly negative, indicating that the stock is likely to follow in that direction for investors trading on sentiment. As a result, a bearish strategy could prove effective if the sentiment ultimately turns out to drive trading.
Upside potential: Using this bearish strategy, the trade would be profitable if CHICO’S FAS closed at or below $7.45 on 19-May-2023. Based on our analysis, there is a 52.20% 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.