Quantchabot has detected a promising Covered Put trade opportunity for NIKOLA CORP (NKLA) for the 27-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NKLA was recently trading at $0.96 and has an implied volatility of 111.61% for this period. Based on an analysis of the options available for NKLA expiring on 27-Oct-2023, there is a 34.37% likelihood that the underlying will close within the analyzed range of $0.81-$0.96 at expiration. In this scenario, the average linear return for the trade would be 10.20%.
Big -7.05% Change: After closing the last trading session at $1.03, NIKOLA CORP opened today at $1.02 and has reached a low of $0.96.
Trade approach: A movement as big as -7.05% 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 $0.96 on 27-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 $1.04 on 27-Oct-2023. Based on our risk-neutral analysis, there is a 67.54% 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.
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