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Quantchabot has detected a promising Long Risk Reversal trade opportunity for VISA (V) for the 17-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
V was recently trading at $150.42 and has an implied volatility of 54.68% for this period. Based on an analysis of the options available for V expiring on 17-Apr-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $150.51-$174.31 at expiration. In this scenario, the average linear return for the trade would be 35.72%.
Big 10.81% Change: After closing the last trading session at $135.74, VISA opened today at $144.84 and has reached a high of $151.08.
Trade approach: A movement as big as 10.81% is a significantly bullish indicator, so this trade is designed to be profitable if V maintains its current direction and does not revert back to pricing on the bearish side of $150.42 on 17-Apr-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 VISA closes at or above $148.90 on 17-Apr-2020. Based on our risk-neutral analysis, there is a 52.93% 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.