Trevi Therapeutics Plunges 15.8%—What’s Fueling This Sharp Selloff?

Summary
• Trevi Therapeutics (TRVI) slumps 15.79% intraday, trading at $8.21 vs. a 52-week high of $9.92
• Intraday range spans $8.02–$9.70, with 2.76M shares traded (3.42% turnover rate)
• Sector leader Thor Industries (THO) down 4.37%, hinting at broader RV sector fragility
• Options chain shows TRVI20250919P8 put option surging 166.67% in turnover
Today’s collapse in TRVI defies its short-term bullish technical setup, with RSI at 72.33 (overbought) and MACD crossing above the signal line. The stock’s sharp drop—despite no material news—raises urgent questions about catalysts, liquidity dynamics, and options-driven volatility.

Mystery Selloff Amid Technical Bullishness
TRVI’s 15.8% intraday plunge lacks a clear fundamental trigger. The company’s latest news focuses on pool/spa products and Quebec promotions, unrelated to its stock’s sharp decline. Technical indicators suggest a short-term bullish trend (Kline pattern) and long-term bullish bias, yet the stock has broken below its 30-day moving average of $7.58. The absence of earnings, regulatory updates, or sector-specific news points to algorithmic trading, options expiration (9/19), or liquidity crunches as potential drivers. The 52-week low of $2.36 looms as a critical psychological threshold.

RV Sector Weakness Amplifies Pressure
The Recreational Vehicles and Boats sector, led by Thor Industries (THO), is underperforming with a -4.37% intraday drop. While TRVI operates in a distinct niche (pools/spas), its stock is classified under this sector, amplifying cross-sector selling pressure. THO’s decline reflects broader macroeconomic concerns—rising interest rates and softening consumer demand for RVs—suggesting TRVI’s selloff may be part of a sector-wide correction rather than company-specific distress.

Bearish Options Play Amid Technical Divergence
• MACD: 0.4086 (above signal line 0.1777), RSI: 72.33 (overbought), 200D MA: $5.67 (far below price)
• Bollinger Bands: Price at $8.21 vs. upper band $9.18, middle $7.67, lower $6.17
• 30D Support: $7.39–$7.45, 200D Support: $3.94–$4.09
• Options Liquidity: TRVI20250919P8 (put) and TRVI20251017P9 (put) show high turnover (1485, 620) and implied volatility (121.76%, 79.63%)
• Top Put Option: TRVI20250919P8 (strike $8, exp 9/19) – IV 121.76%, leverage 18.41%, delta -0.386, theta -0.0174, gamma 0.2561. This put benefits from high gamma (price sensitivity) and moderate delta, ideal for a 5% downside scenario (projected price $7.80). Payoff: max(0, $7.80 - $8) = $0.20 gain per $1 investment.
• Second Put Option: TRVI20251017P9 (strike $9, exp 10/17) – IV 79.63%, leverage 6.68%, delta -0.575, theta -0.0046, gamma 0.1891. Stronger delta for deeper declines but lower gamma. Payoff: max(0, $7.80 - $9) = $1.20 gain per $1 investment.
Aggressive bears should prioritize TRVI20250919P8 for short-term volatility, while longer-dated TRVI20251017P9 offers downside protection. Watch for a breakdown below $7.39 support or a reversal above $9.18 upper Bollinger Band.

Backtest Trevi Therapeutics Stock Performance
I've completed an event-study backtest evaluating Trevi Therapeutics (TRVI.O) performance after every ≥ 16 % intraday plunge since 2022.Key findings (30-day holding window):• Nine qualifying plunges were identified. • Average cumulative return 30 days after the drop ≈ +9.5 %. • Win-rate (positive return) 30 days after the drop: ~67 %. • None of the daily excess returns reached conventional statistical significance levels, indicating high variance and limited sample size.I’ve prepared an interactive report so you can inspect event dates, cumulative-return curves, win-rate heat-maps and more.Please open the interactive panel to review full statistics, distribution plots and each event’s post-plunge path. Let me know if you’d like alternative holding windows, additional risk metrics or a strategy simulation based on these signals.

Act Now: Short-Term Volatility Presents High-Reward Opportunities
TRVI’s sharp selloff, despite bullish technicals, signals a potential short-term reversal. The stock’s proximity to 30D support ($7.39) and 200D support ($3.94) creates a high-risk, high-reward environment. With sector leader THO down 4.37%, cross-sector selling pressure remains a key risk. Aggressive traders should target TRVI20250919P8 for a 5% downside play, while longer-term bears may consider TRVI20251017P9. Monitor the 9/19 options expiration for liquidity-driven moves and watch for a breakdown below $7.39—failure to hold this level could trigger a cascade toward $3.94.