Quantchabot has detected a new Bear Call Spread trade opportunity for ROYALTY PHARMA PLC (RPRX) for the 17-Jan-2025 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
RPRX was recently trading at $24.91 and has an implied volatility of 23.72% for this period. Based on an analysis of the options available for RPRX expiring on 17-Jan-2025, there is a 34.23% likelihood that the underlying will close within the analyzed range of $23.39-$24.99 at expiration. In this scenario, the average linear return for the trade would be 16.00%.
52 week low: ROYALTY PHARMA PLC recently reached a new 52-week low at $24.32. RPRX had traded in the range $24.46-$31.66 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if RPRX maintains its current direction and does not revert back to pricing on the bullish side of $24.91 on 17-Jan-2025. 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 ROYALTY PHARMA PLC closes at or below $25.50 on 17-Jan-2025. Based on our risk-neutral analysis, there is a 61.91% 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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