Big Gainer Alert: Trading today’s 9.0% move in NIO INC $NIO

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Quantchabot has detected a promising Long Risk Reversal trade opportunity for NIO INC (NIO) for the 28-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

NIO was recently trading at $4.10 and has an implied volatility of 102.77% for this period. Based on an analysis of the options available for NIO expiring on 28-Feb-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $4.11-$6.09 at expiration. In this scenario, the average linear return for the trade would be 89.50%.

Big 9.04% Change: After closing the last trading session at $3.76, NIO INC opened today at $4.19 and has reached a high of $4.22.

Trade approach: A movement as big as 9.04% is a significantly bullish indicator, so this trade is designed to be profitable if NIO maintains its current direction and does not revert back to pricing on the bearish side of $4.10 on 28-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 NIO INC closes at or above $4.01 on 28-Feb-2020. Based on our risk-neutral analysis, there is a 52.45% 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.