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Quantchabot has detected a promising Short Risk Reversal trade opportunity for HYLIION (HYLN) for the 5-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

HYLN was recently trading at $16.65 and has an implied volatility of 101.21% for this period. Based on an analysis of the options available for HYLN expiring on 5-Feb-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $13.05-$16.65 at expiration. In this scenario, the average linear return for the trade would be 57.99%.

Big -7.19% Change: After closing the last trading session at $17.94, HYLIION opened today at $18.00 and has reached a low of $16.60.

Trade approach: A movement as big as -7.19% is a significantly bearish indicator, so this trade is designed to be profitable if HYLN maintains its current direction and does not revert back to pricing on the bullish side of $16.65 on 5-Feb-2021. 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 HYLIION closes at or below $17.19 on 5-Feb-2021. Based on our risk-neutral analysis, there is a 55.19% 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.