Quantchabot has detected a promising Bear Call Spread trade opportunity for UNITY SOFTWARE INC (U) for the 17-Feb-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
U was recently trading at $32.05 and has an implied volatility of 82.86% for this period. Based on an analysis of the options available for U expiring on 17-Feb-2023, there is a 34.24% likelihood that the underlying will close within the analyzed range of $26.03-$32.16 at expiration. In this scenario, the average linear return for the trade would be 21.51%.
Big -8.31% Change: After closing the last trading session at $34.96, UNITY SOFTWARE INC opened today at $33.43 and has reached a low of $31.67.
Trade approach: A movement as big as -8.31% is a significantly bearish indicator, so this trade is designed to be profitable if U maintains its current direction and does not revert back to pricing on the bullish side of $32.05 on 17-Feb-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 UNITY SOFTWARE INC closes at or below $32.18 on 17-Feb-2023. Based on our risk-neutral analysis, there is a 50.15% 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.