Quantchabot has detected a promising Covered Put trade opportunity for ROIVANT SCIENCES LTD. COMMON SHARES (ROIV) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ROIV was recently trading at $11.68 and has an implied volatility of 72.60% for this period. Based on an analysis of the options available for ROIV expiring on 20-Oct-2023, there is a 34.19% likelihood that the underlying will close within the analyzed range of $9.25-$11.75 at expiration. In this scenario, the average linear return for the trade would be 21.30%.
Big -7.30% Change: After closing the last trading session at $12.60, ROIVANT SCIENCES LTD. COMMON SHARES opened today at $12.65 and has reached a low of $11.63.
Trade approach: A movement as big as -7.30% is a significantly bearish indicator, so this trade is designed to be profitable if ROIV maintains its current direction and does not revert back to pricing on the bullish side of $11.68 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 ROIVANT SCIENCES LTD. COMMON SHARES closes at or below $11.77 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 50.26% 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.