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Quantchabot has detected a promising Long Risk Reversal trade opportunity for MASTERCARD (MA) for the 24-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MA was recently trading at $230.61 and has an implied volatility of 53.41% for this period. Based on an analysis of the options available for MA expiring on 24-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $230.39-$272.41 at expiration. In this scenario, the average linear return for the trade would be 29.94%.
Big 13.43% Change: After closing the last trading session at $203.30, MASTERCARD opened today at $215.92 and has reached a high of $231.29.
Trade approach: A movement as big as 13.43% is a significantly bullish indicator, so this trade is designed to be profitable if MA maintains its current direction and does not revert back to pricing on the bearish side of $230.61 on 24-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 MASTERCARD closes at or above $229.85 on 24-Apr-2020. Based on our risk-neutral analysis, there is a 50.56% 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.