Quantchabot has detected a promising Short Risk Reversal trade opportunity for SUPER MICRO COMPUTER (SMCI) for the 19-May-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SMCI was recently trading at $94.52 and has an implied volatility of 58.00% for this period. Based on an analysis of the options available for SMCI expiring on 19-May-2023, there is a 31.99% likelihood that the underlying will close within the analyzed range of $64.58-$94.50 at expiration. In this scenario, the average linear return for the trade would be 102.44%.
Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, SUPER MICRO COMPUTER 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 SMCI 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 SUPER MICRO COMPUTER closed at or below $115.45 on 19-May-2023. Based on our analysis, there is a 67.14% 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.