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Big Loser Alert: Trading today’s -7.0% move in RLX TECHNOLOGY INC

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Quantchabot has detected a promising Covered Put trade opportunity for RLX TECHNOLOGY INC (RLX) for the 19-Nov-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

RLX was recently trading at $5.38 and has an implied volatility of 125.96% for this period. Based on an analysis of the options available for RLX expiring on 19-Nov-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $3.88-$5.38 at expiration. In this scenario, the average linear return for the trade would be 43.31%.

Big -7.01% Change: After closing the last trading session at $5.78, RLX TECHNOLOGY INC opened today at $5.80 and has reached a low of $5.36.

Trade approach: A movement as big as -7.01% is a significantly bearish indicator, so this trade is designed to be profitable if RLX maintains its current direction and does not revert back to pricing on the bullish side of $5.38 on 19-Nov-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 RLX TECHNOLOGY INC closes at or below $7.67 on 19-Nov-2021. Based on our risk-neutral analysis, there is a 86.30% 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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