Quantchabot has detected a promising Bear Call Spread trade opportunity for TRIP.COM GROUP LTD ADS (TCOM) for the 15-Sep-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TCOM was recently trading at $37.39 and has an implied volatility of 38.78% for this period. Based on an analysis of the options available for TCOM expiring on 15-Sep-2023, there is a 34.33% likelihood that the underlying will close within the analyzed range of $35.04-$37.45 at expiration. In this scenario, the average linear return for the trade would be 21.14%.
Big -7.40% Change: After closing the last trading session at $40.38, TRIP.COM GROUP LTD ADS opened today at $38.50 and has reached a low of $37.15.
Trade approach: A movement as big as -7.40% is a significantly bearish indicator, so this trade is designed to be profitable if TCOM maintains its current direction and does not revert back to pricing on the bullish side of $37.39 on 15-Sep-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 TRIP.COM GROUP LTD ADS closes at or below $37.50 on 15-Sep-2023. Based on our risk-neutral analysis, there is a 50.78% 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.