Quantcha now offering unlimited commission-free options trading.

Quantchabot has detected a promising Short Risk Reversal trade opportunity for PACIFIC ETHANOL INC. COMMON S (PEIX) for the 20-Nov-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

PEIX was recently trading at $10.63 and has an implied volatility of 124.61% for this period. Based on an analysis of the options available for PEIX expiring on 20-Nov-2020, there is a 34.12% likelihood that the underlying will close within the analyzed range of $7.46-$10.63 at expiration. In this scenario, the average linear return for the trade would be 79.42%.

Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, PACIFIC ETHANOL INC. COMMON S was recently trending, indicating that breaking news and/or market activity has significantly impacted sentiment toward the stock. This movement can be interpretted as a sign of more near-term price movement for the underlying.

Trade approach: The recent sentiment change in PEIX on StockTwits appears to be significantly negative, indicating that the stock is likely to follow in that direction for investors trading on sentiment. As a result, a bearish strategy could prove effective if the sentiment ultimately turns out to drive trading.

Upside potential: Using this bearish strategy, the trade would be profitable if PACIFIC ETHANOL INC. COMMON S closed at or below $11.20 on 20-Nov-2020. Based on our analysis, there is a 55.85% 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.