Quantchabot has detected a promising Bear Call Spread trade opportunity for NIKOLA CORP (NKLA) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NKLA was recently trading at $1.22 and has an implied volatility of 171.59% for this period. Based on an analysis of the options available for NKLA expiring on 20-Oct-2023, there is a 34.17% likelihood that the underlying will close within the analyzed range of $0.63-$1.23 at expiration. In this scenario, the average linear return for the trade would be 14.96%.
Big -7.25% Change: After closing the last trading session at $1.31, NIKOLA CORP opened today at $1.35 and has reached a low of $1.20.
Trade approach: A movement as big as -7.25% is a significantly bearish indicator, so this trade is designed to be profitable if NKLA maintains its current direction and does not revert back to pricing on the bullish side of $1.22 on 20-Oct-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 NIKOLA CORP closes at or below $1.23 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 50.24% 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.