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Quantchabot has detected a promising Bear Put Spread trade opportunity for PINDUODUO INC. AMERICAN DEPOSITARY SHARES (PDD) for the 12-Mar-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

PDD was recently trading at $145.36 and has an implied volatility of 82.82% for this period. Based on an analysis of the options available for PDD expiring on 12-Mar-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $132.93-$145.36 at expiration. In this scenario, the average linear return for the trade would be 56.00%.

Big -7.31% Change: After closing the last trading session at $156.82, PINDUODUO INC. AMERICAN DEPOSITARY SHARES opened today at $153.15 and has reached a low of $143.13.

Trade approach: A movement as big as -7.31% is a significantly bearish indicator, so this trade is designed to be profitable if PDD maintains its current direction and does not revert back to pricing on the bullish side of $145.36 on 12-Mar-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 PINDUODUO INC. AMERICAN DEPOSITARY SHARES closes at or below $146.80 on 12-Mar-2021. Based on our risk-neutral analysis, there is a 54.38% 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.