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Quantchabot has detected a promising Long Risk Reversal trade opportunity for GTT COMMUNICATIONS INC. (GTT) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
GTT was recently trading at $12.27 and has an implied volatility of 75.95% for this period. Based on an analysis of the options available for GTT expiring on 21-Feb-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $12.29-$17.31 at expiration. In this scenario, the average linear return for the trade would be 30.23%.
Big 7.78% Change: After closing the last trading session at $11.38, GTT COMMUNICATIONS INC. opened today at $11.47 and has reached a high of $12.30.
Trade approach: A movement as big as 7.78% is a significantly bullish indicator, so this trade is designed to be profitable if GTT maintains its current direction and does not revert back to pricing on the bearish side of $12.27 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 GTT COMMUNICATIONS INC. closes at or above $11.60 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 56.71% 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.