Big Gainer Alert: Trading today’s 9.0% move in VALARIS PLC $VAL

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Quantchabot has detected a promising Long Risk Reversal trade opportunity for VALARIS PLC (VAL) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

VAL was recently trading at $6.39 and has an implied volatility of 96.18% for this period. Based on an analysis of the options available for VAL expiring on 21-Feb-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $6.41-$9.37 at expiration. In this scenario, the average linear return for the trade would be 80.82%.

Big 9.04% Change: After closing the last trading session at $5.86, VALARIS PLC opened today at $6.09 and has reached a high of $6.74.

Trade approach: A movement as big as 9.04% is a significantly bullish indicator, so this trade is designed to be profitable if VAL maintains its current direction and does not revert back to pricing on the bearish side of $6.39 on 21-Feb-2020. If possible, the trade has been padded such that slight movement against the trade would still return a profit.

Upside potential: Using this bullish strategy, the trade would be profitable if VALARIS PLC closes at or above $6.25 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 52.60% 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.