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Big Loser Alert: Trading today’s -9.2% move in SHOALS TECHNOLOGIES GROUP INC. CLASS A COMMON STO

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Quantchabot has detected a promising Short Risk Reversal trade opportunity for SHOALS TECHNOLOGIES GROUP INC. CLASS A COMMON STO (SHLS) for the 20-Aug-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

SHLS was recently trading at $32.05 and has an implied volatility of 67.24% for this period. Based on an analysis of the options available for SHLS expiring on 20-Aug-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $25.77-$32.05 at expiration. In this scenario, the average linear return for the trade would be 39.75%.

Big -9.17% Change: After closing the last trading session at $35.28, SHOALS TECHNOLOGIES GROUP INC. CLASS A COMMON STO opened today at $33.02 and has reached a low of $30.65.

Trade approach: A movement as big as -9.17% is a significantly bearish indicator, so this trade is designed to be profitable if SHLS maintains its current direction and does not revert back to pricing on the bullish side of $32.05 on 20-Aug-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 SHOALS TECHNOLOGIES GROUP INC. CLASS A COMMON STO closes at or below $33.05 on 20-Aug-2021. Based on our risk-neutral analysis, there is a 55.61% 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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